The Indonesian internet economy was sized at an estimated USD 40 billion in 2019 and is expected to reach USD 130 billion by 2025. Although omnipresent “unicorn” retailers tend to be front of mind in this sector, e-commerce is dominated by micro enterprises with one to four employees. In fact, almost 20% of all online commerce activities are conducted on Instagram.
While the digital economy is booming, the Indonesian government is struggling to keep up with the protection of digital consumer rights. The National Consumer Protection Agency (BPKN) and the Indonesian Consumer Association (YLKI) recorded only 48 complaints regarding e-commerce transactions in 2019.
The following reforms are recommended to open up non-litigation and litigation avenues for the protection of digital consumer rights once corporate customer service fails to settle complaints by e-commerce customers.
Finally, Indonesia’s competition policy needs to complement consumer protection policies in order to secure the benefits of competition while preventing restrictive business practices. There should be institutional coordination between competition and consumer-related agencies. Barriers to entry for new businesses into e-commerce should be lowered to promote market competition. The Indonesian Anti-Monopoly Law No. 5/1999 should be reviewed and updated to accommodate the digital economy and to incorporate digital consumer protection issues.