Technological advancements have driven digital commerce, including the transformation of TikTok into a transaction platform. However, issues such as unfair competition and weak consumer protection have emerged, prompting the government to issue Minister of Trade Regulation Number 31 of 2023 to restrict the function of social media as a social-commerce platform. This regulation led to the temporary closure of TikTok Shop before it eventually partnered with Tokopedia. This study analyzes the effectiveness of this policy in the regeneration of TikTok Shop and its relevance to Islamic law using an empirical juridical research method with a qualitative descriptive analysis approach. The findings indicate that the policy is not yet fully responsive to the needs of MSMEs, as it still allows market dominance by major platforms. From the perspective of Sadd Aż-żari’ah, the study emphasizes the need for proportional regulations to prevent hindrance to the digital economy. The study concludes that e-commerce regulations must be more responsive and solution-oriented in protecting small businesses and consumers. The government must ensure that implemented policies not only impose restrictions but also provide support for MSMEs to adapt to the digital economy. With a more structured and consistent policy framework, these regulations can foster a fairer and more sustainable trade ecosystem.