Last year, the Indonesian government introduced Governemt Regulation 80/2019 on Trade Through Electronic Systems with technical provisions on electronic trade. The regulation can be simplified into 3 aspects:
- Defining e-commerce businesses (and platforms) as the Organisers of Electronically-Enabled Trade (PPMSE) and setting clear distinction with merchants that use their facilities.
- Prerequisites for business practitioners: securing business licensing, ensuring compliance with common business regulations, and transparency.
- Obligation to consumer protection: obliging business practitioners to provide contact for customer complaints or inquiries.
The minister of trade stated that this regulation is aimed to protect consumers and provide certainty for businesses. He assured that any procedure encompassed within the regulation can be executed remotely through internet and free of charge.
Some ISD concerns regarding PP 80/2019 rules:
The regulation can inhibit the development of Indonesia’s e-Commerce, especially as it requires merchants to have a business license. This will certainly be a new barrier of entry for MSMEs to become online traders.
Cross-border trade can also be stalled as the extraterritorial nature of the regulation requires Overseas Business Actors serving Consumers to be domiciled in the jurisdiction of the Unitary Republic of Indonesia. This certainly hinders the potential for trade between countries, which in fact will greatly benefit businesses in Indonesia. Through online commerce, Indonesian business people not only get new market access, but also alternative suppliers for production raw materials.
Data storage obligation will also become an additional burden. This regulation requires data and information related to financial transactions to be stored with a minimum period of 10 years; and 5 years for non-financial transaction data. Furthermore, there is no clarity about what data needs to be and does not need to be stored.