The Government’s Role in Overcoming TikTok Monopoly Problems: TikTok Shop Vs Local MSMEs

In this digital era full of innovation, social media platforms have become an integral part of the daily lives of global society. One very popular platform is TikTok, a short video sharing application that has captured the attention of millions of users around the world. However, along with its rapid popularity, issues related to monopoly have also emerged which have raised concerns among users, the small business community and the government.

Monopoly in the context of TikTok refers to market domination by one single entity, which in this case is TikTok, with enormous influence over the online video sharing industry. This phenomenon raises serious questions about healthy competition, innovation and diversity in the digital ecosystem. Therefore, the government plays a very important role in tackling this monopoly to protect consumer interests, encourage healthy competition, and ensure sustainable economic growth.

Even TikTok’s estimated annual revenue has increased very significantly from year to year. The details are as follows:

Estimated Annual Revenue of TikTok (2017-2022)

Source: (Santika, 2023)

In fact, several places in Indonesia experienced a significant decline in income (Hidayatullah, 2023). TikTok went viral or got attention after one of the trading places in Jakarta experienced a decline in income. So that it triggers deep attention on the part of the government to be able to act.

The government’s form of overcoming economic problems caused by social media platforms turning into massive online trading venues, even to the point of monopolizing trade, especially in Indonesia (Bestari, 2023). This platform, which initially focused on social media, then spread to the economy, quickly dominated the market, even with active user data of 800 million people (Supriyanto et al., 2023). It is in this context that we will explore the role played by the government in overcoming the monopoly carried out by TikTok. Through policies, regulations and international cooperation, the government has the responsibility to create a digital environment that is fair, inclusive and competitive. Based on the description and explanation above, the discussion is related to the role given by the government to help local businesses continue to compete in a healthy manner.

Analysis and Discussion

Recently, TikTok social media with one of the largest number of active users in the world is owned by the Chinese company, ByteDance. In July 2018, the Indonesian government banned domestic use of TikTok, claiming that the platform contained content that was inconsistent with Indonesian culture and morals. However, in the following years, TikTok managed to re-make its mark in the Indonesian market and gained significant popularity among local users. In 2018, the Indonesian Ministry of Communication and Information (Kemenkominfo) issued a regulation that allows blocking content on social media that is deemed to violate the law or social norms (Daon, 2018).

The Indonesian government has taken firm steps by issuing policies and regulations that support the ban on TikTok’s trading monopoly. They use their authority to monitor and regulate the content available on the platform. The Ministry of Communication and Information ensures that TikTok complies with local laws and regulations, including cultural and moral norms adhered to by Indonesian society.

Apart from that, the government also protects consumer interests. By banning the TikTok trading monopoly, the Indonesian government protects consumer interests by ensuring healthy competition in the market. With competition, consumers have more choices, and this can lead to better innovation and more reasonable prices. It’s just that several places or markets in Indonesia have experienced a significant decline in income, it is feared that this will have a wider impact and massively destroy the micro economy (Arto, 2023).

Then in order to help local entrepreneurs face existing developments. The Indonesian government supports local startups and domestic social media platforms to grow and develop. By prohibiting TikTok’s trading monopoly, the government opens up opportunities for local platforms to gain a larger market share and compete more fairly at the national level. Therefore, a ban related to this platform is deemed necessary. This is regulated in the Minister of Trade Regulation (Permen) Number 31 of 2023 which states that social commerce such as TikTok Shop is prohibited from carrying out buying and selling transactions, but can only advertise and promote (Yolandha, 2023).

The Indonesian government, through diplomacy and international cooperation, is fighting for policies that support fair and open competition in cyberspace. In the case of TikTok, Indonesia can coordinate with other countries facing similar issues to enforce regulations that benefit small and medium industry players. Several countries have even implemented a ban on TikTok trading (Bestari, 2023). Even in other cases, such as America, prohibits the use of this platform because it originates from China (Wahidin, 2023).

Apart from regulation, the government also plays a role in increasing public awareness regarding the impacts of trade monopolies, including risks related to privacy, security and market dominance. Education and information campaigns can help people understand the importance of healthy competition in the digital world. Education regarding public awareness is important, so that local products can compete with existing international products so that the national economy can grow and produce good economic conditions on a micro and macro scale.

In conclusion, the Indonesian government’s role in prohibiting TikTok’s trade monopoly reflects their commitment to healthy competition and the interests of local consumers. With firm policies and support for local innovation, the Indonesian government plays an important role in building a digital environment that is fair and inclusive for all stakeholders.


The government’s role that has been carried out to help local businesses is to create regulations for the protection of local consumers and traders, to create regulations regarding TikTok in conducting trade, international cooperation to ensure the same regulations in each country in making appropriate policies through existing diplomatic channels, and provide public education. The government’s role in this matter is indeed necessary, because unhealthy competition has been created in market conditions with the innovation carried out by TikTok with its new TikTok Shop menu, plus many artists or influencers trade there with goods that are identical to the market but at prices which is cheaper. Therefore, the roles carried out previously are necessary to stabilize market conditions and help local MSMEs.

Wahyu Agani
Wahyu Agani
2nd degree student at Gadjah Mada University (UGM) in public administration