Indonesia has banned e-commerce transactions on social media platforms, the trade minister said on Wednesday, a move seen as a blow to popular short video app TikTok, Reuters reported on Wednesday.

The government said the move, which takes effect immediately, is aimed at protecting offline merchants and marketplaces, adding that predatory pricing on social media platforms is threatening small and medium-sized enterprises.

Indonesia Trade Minister Zulkifli Hasan on Wednesday told reporters that the regulation is intended to ensure “fair and just” business competition, adding that it was also intended to ensure data protection of users, according to the report.

He warned of letting social media become an e-commerce platform, shop, and bank all at the same time.

TikTok, owned by China’s ByteDance, has 125 million active monthly users in Indonesia and has been looking to translate the large user base into a major e-commerce revenue source.

A TikTok Indonesia spokesperson told Reuters it would pursue a constructive path forward and was “deeply concerned” with the announcement, “particularly how it would impact the livelihoods of the 6 million” local sellers active on TikTok Shop.

The new regulation also requires e-commerce platforms in Indonesia to set a minimum price of $100 for certain items that are directly purchased from abroad, according to the regulation document reviewed by Reuters, and that all products offered should meet local standards.

Zulkifli said TikTok had one week to comply with the regulation or face the threat of closure. Indonesia Deputy Trade Minister Jerry Sambuaga earlier this month named TikTok’s live streaming features as an example of people selling goods on social media.

Earlier on Monday, Indonesian President Joko Widodo said the government may issue a regulation on the use of social media to sell goods in the country.

“What the people are expecting is that the advancement of technology can create new economic potential, not kill existing economies,” he was quoted as saying.

Ministers have repeatedly said that e-commerce sellers using predatory pricing on social media platforms are threatening offline markets in Indonesia, with some officials specifically citing the video platform TikTok as an example, Reuters reported on Monday.

E-commerce transactions in Indonesia amounted to nearly $52 billion last year and of that, 5 percent took place on TikTok, according to data from consultancy Momentum Works, the report added.

Indonesia is among the few markets where TikTok has launched TikTok Shop, as it seeks to leverage its large user base in the country.

Earlier in June, TikTok, owned by China’s ByteDance, announced it would invest billions of dollars in Southeast Asia over the next few years, as it doubles down on the region.

Southeast Asia, a region with a collective population of 630 million – half of them under 30 – is one of TikTok’s biggest markets in terms of user numbers, generating more than 325 million visitors to the app every month.

But the platform has yet to translate the large user base into a major e-commerce revenue source in the region as it faces fierce competition from bigger rivals of Sea’s Shopee, Alibaba’s Lazada and GoTo’s Tokopedia, Reuters reported then.

“We’re going to invest billions of dollars in Indonesia and Southeast Asia over the next few years,” TikTok CEO Shou Zi Chew said at a forum it organised in Jakarta then.

Indonesia has overturned its ban on Chinese video app Tik Tok in July 2018 after it agreed to censor “negative content”, according to earlier reports.

Access to TikTok was blocked on July 3, 2018 by authorities in Indonesia, home to the world’s biggest Muslim population, for featuring content deemed pornographic and blasphemous.

Ministry of Communications spokesperson Noor Iza told Reuters the app was unblocked by the government.

According to communications ministry letter seen by Reuters, the ban was overturned after Tik Tok agreed to clear “all negative content” from the app and open an office in Indonesia to liaise with the government over content.

The letter also said that Tik Tok had agreed to increase the security mechanisms of the app and put additional restrictions on users aged 14-18 years, according to Reuters’ reported dated July 11, 2018.

Indonesia may issue regulation on social media e-commerce – report