ICC Chairman Meets Minister of Cooperatives and SMEs To Discuss The Importance of Digital Market Law.

Wednesday, November 22, 2023

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Jakarta (6/10) Chairman of the Indonesia Competition Commission (ICC), Prof. M. Afif Hasbullah, met Minister of Cooperatives and SMEs, Teten Masduki, in his office to discuss the need for a law regulating digital markets to level the playing field for Indonesian micro, small, and medium enterprises. The meeting, held on Thursday (5/10), emphasized that without adequate regulations, anti-competitive behavior can be easily implemented by digital market industry players and will lead to a concentrated, inefficient market and a business climate that is not conducive to ensuring equal business opportunities for business actors. This is in line with President Joko Widodo’s message to the participants of the 2023 Lemhannas education program at the State Palace in Jakarta on Wednesday (4/10), which emphasized the importance of regulations that catch up with technological developments so that Indonesia is not subject to modern-era colonialism in the economic field.

During the meeting, the Chairman of the ICC said that based on studies conducted since 2019 until now, there is still an imbalance in the ability to compete (playing field) between business actors engaged in the digital market. This imbalance has resulted in the strong bargaining position of one party and the emergence of potential unfair behavior, such as abuse of dominant positions and monopolistic practices carried out by business actors in the digital market.

“There are at least two factors that affect this imbalance, namely the platform factor and the international trade factor,” explained the Chairman of the ICC. Platforms can utilize big data and artificial intelligence to develop product advertisements that are specific to certain consumers (targeted advertising) and develop ecosystems on the platform by combining several services in one platform or application. Currently, the platform industry in Indonesia and around the world is highly concentrated, giving it the ability to engage in predatory pricing, tying, bundling, self-referencing, and various other anti-competitive behaviors. International trade also needs to be anticipated from the export trade policies of the country of origin, which contain various capital and logistics subsidies as well as dumping practices, continued the Chairman of the ICC.

“The presence of legislation related to the digital market is urgently needed so that data utilization, access, and algorithm games by the platform can be controlled,” said the Chairman of the ICC.

The Minister of Cooperatives and SMEs welcomed the issues raised by the Chairman of the ICC and agreed that, with the potential for a digital economy of IDR 11,250 trillion by 2030, the current regulations are not enough to solve the current problems. At least two regulations are needed, namely the regulation of big data and digital markets, especially with regard to the use of technology and algorithms, as well as the flows of goods. For this reason, the Minister of Cooperatives and SMEs invites the ICC to collaborate in reviewing the policy.