INDONESIA Law and Practice Contributed by: Agus Ahadi Deradjat (Agung), Mahiswara Timur, Nina Cornelia Santoso and Natasya Nurul Amalia, ABNR Counsellors at Law
• Digital goods: any intangible goods, in the form of electronic or digital information, resulting from conversion or that were origi - nally in electronic form, such as software, multimedia and/or electronic data. Digital goods include electronic games, e-books, music, etc. • Digital services: any services sent via the internet or electronic networks that can only be used via IT, including but not limited to software-based services. Digital services include online advertising, online consulta - tion, digital marketing, etc. 1.3 Taxation of Digital Advertising As “digital services” under MOFR 81 also covers digital advertising, digital advertising that origi - nates from foreign service providers is subject to the 11% VAT rate (projected to increase to 12%). 1.4 Consumer Protection Law No 8 of 1999 on Consumer Protection (the “Consumer Protection Law”) serves as the umbrella regulation for safeguarding consumer rights. The Consumer Protection Law gener - ally applies to all types of goods and services, including those in the digital realm. In addition, specific provisions on consumer protection under GR 71 and MR 31 are also applicable to digital goods and services in the TMT sector. To ensure compliance with the Consumer Pro - tection Law, undertakings that operate in the digital economy and offer digital goods and ser - vices must, among other things: • not offer, promote or advertise goods and services deceivingly; • not make false or misleading advertisements or claims; • not directly or indirectly degrade other goods and/or services;
• provide a refund mechanism for consumers who wish to cancel their purchases; and • provide a time limit for consumers to return the sent goods and/or delivered services, should there be any discrepancy with the contract or hidden defect. Consumer Complaint Service GR 80 requires e-commerce business under - takings to protect consumers’ rights in accord - ance with the consumer protection regulations, including the Consumer Protection Law and any sector-specific regulations that may be applica - ble for such undertakings (eg, consumer protec - tion provisions on payment instruments that are governed under the payment system regime). MR 31 further stipulates that e-commerce operators must provide a consumer complaint service, which must be visible to all custom - ers accessing the products and display (i) the e-commerce operator’s contact information for consumer’s complaints and (ii) the Directorate General of Consumer Protection of Ministry of Trade’s contact information. Dispute Resolution Forum for Consumer- Related Disputes Theoretically, the Consumer Protection Law ensures the right of consumers to file a lawsuit against business undertakings via an in-court or out-of-court dispute settlement, depending on the choice of forum agreed by the disputing parties. However, the latest EIT Law amendment requires parties to an international electronic transaction that contains standardised clauses made by an ESO to be governed by Indonesian law, in the event that the contract involves an Indonesian party or is implemented in Indonesia. To handle consumer disputes effectively, it is best practice for companies offering digital ser -
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