INDONESIA Law and Practice Contributed by: Agus Ahadi Deradjat (Agung), Mahiswara Timur, Nina Cornelia Santoso and Natasya Nurul Amalia, ABNR Counsellors at Law
1. Digital Economy 1.1 Key Challenges
• Government Regulation No 71 of 2019 on the Provision of Electronic Systems and Transac - tions (GR 71); • Minister of Communications and Information Technology (the MCIT, currently known as the Minister of Communications and Digital or the MOCD) Regulation No 20 of 2016 on Per - sonal Data Protection in Electronic Systems (MR 20); and • MOCD Regulation No 5 of 2020 on Private Electronic Systems Operators, as amended by MOCD Regulation No 10 of 2021 (MR 5). An electronic system operator (ESO) would be subject to these obligations: • obtaining an ESO registration certificate – the operator of an electronic system must register themselves with the MOCD if they provide their digital platforms within the Indonesian territory or carry out business in Indonesia, or if their electronic systems are used or offered within Indonesian territory; • applying content moderation – the ESO must ensure that its electronic system does not contain prohibited electronic information and/ or electronic documents and does not facili - tate the distribution of prohibited electronic information and/or electronic documents (eg, pertaining to pornography, gambling, slan - der, scam, hate speech, violence, intellectual property (IP) rights infringement, information security breach, content that causes pub - lic disturbance, content that violates social norms, hoax/fake news or extortion); • using secure and compatible hardware and secure and reliable software; • maintaining security measures for the compo - nents of electronic systems; and • complying with the minimum requirements for the operation of electronic systems stipulated under the regulations.
As in other parts of the world, the digital econ - omy plays a pivotal role in shaping Indonesia, particularly as a developing country that is heav - ily reliant on various types of inbound invest - ment. The Indonesian government has been quite aggressive in introducing new regulations (or, in some cases, updates to current regula - tory regimes) in order to accommodate digital economy-related trends. The government has made efforts to regu - late the digital economy and understands the dynamics of, and rapid changes in, the digital economy. The government is using both regula - tions, as “hard law”, and policies to govern this sector. This approach has been taken to allow the government to balance the mandatory legal requirements with the implementation of addi - tional requirements that might be necessary for dealing with new business models or issues. However, this approach may lead to inconsist - ent enforcement and uncertainties for industry players from time to time. The Indonesian digital economy is mainly regu - lated under the following laws and regulations. General Operation of Electronic Systems The advancement of the digital economy is inseparable from the widespread use of elec - tronic systems. The operation of electronic sys - tems in Indonesia is regulated under the follow - ing laws and regulations: • Law No 11 of 2008 as last amended by Law No 1 of 2024 on Electronic Information and Transactions (the “EIT Law”);
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