Indonesia stresses tailored approach for digital economy regulations

Jakarta (ANTARA) - Indonesia’s Ministry of Communication and Digital Affairs emphasized the need for a cautious and highly tailored approach to regulating the nation's digital economy, warning against copying Western policy frameworks.

The ministry’s Director General of Digital Ecosystems, Edwin Hidayat Abdullah, stated that Indonesia’s unique market structure and societal characteristics require rigorous examination before any regulatory steps are finalized.

"We must be very careful in regulating the digital economy in Indonesia," Edwin said in a statement released on Saturday.

“Its characteristics differ significantly from those in Australia or Europe. Therefore, the regulatory approach must be examined in great detail, as the market structure and the characteristics of society in Indonesia are distinct from those in those countries,” he explained.

Edwin noted that Indonesia’s digital landscape operates as an interconnected, multi-stakeholder ecosystem where policy changes impact a diverse network of participants, ranging from consumers and merchants to ride-hailing drivers and logistics providers.

"Because this is a multi-stakeholder economy, when we address online commerce, we are also dealing with motorcycle taxi drivers, truck drivers, merchants and various other parties," Edwin explained, stressing that each group maintains distinct economic stakes.

He pointed out that the digital ecosystem has evolved beyond a traditional "gig economy" into a "platform-dependent economy," where market supply and demand are heavily driven by incentives set by major tech platforms.

As these companies pursue profitability by adjusting service fees, raising merchant commissions and reducing incentives, grassroots partners face mounting financial pressures.

Edwin also cautioned against the perils of excessive vertical integration within digital platforms, warning it could stifle technology diffusion, concentrate resources, complicate data sovereignty and erode Indonesia's capacity to retain domestic economic value.

To address these challenges, the ministry has outlined three core regulatory principles which include creating inclusive opportunities, ensuring fair competition and providing business certainty.

Edwin stressed that state intervention will be applied selectively, adhering to the directive that government regulation is triggered primarily by market failures.

"The minister’s directive is very clear: we regulate the market when a market failure occurs. If there is no market failure, we let the market run its course," Edwin added.

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Translator: Farhan Arda Nugraha, Yashinta Difa
Editor: Rahmad Nasution
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