Indonesia's Digital Competition Landscape: Regulatory Challenges and Opportunities

The Need for Regulatory Reform

The rapid transformation of Indonesia's digital economy has created both opportunities and challenges for regulators. The Competition and Supervisory Commission (KPPU) is at the forefront of addressing these challenges through comprehensive regulatory reforms. KPPU Chairman M. Fanshurullah Asa highlighted that conventional approaches are no longer sufficient to win the global competition.

Key Strategic Pillars

1. Progressive Legal Reform: Updating existing laws to address modern digital market complexities
2. International Standard Alignment: Harmonizing regulations with global best practices, particularly in light of Indonesia's BRICS membership and potential OECD accession
3. Evolution in Law Enforcement: Enhancing enforcement capabilities through digital forensics and algorithmic auditing

Expert Insights and International Perspectives

Professor Rhenald Kasali emphasized that technology has become the new "invisible hand" in market competition, influencing consumer choices, price fluctuations, and market access. He recommended six crucial policy steps, including:

1. Combining preventive (ex-ante) and punitive (ex-post) law enforcement
2. Enhancing digital forensic capabilities
3. Implementing international-standard algorithmic audits
4. Ensuring data interoperability
5. Strengthening merger oversight to protect innovation

Global Best Practices

The Jakarta International Competition Forum (3JICF) 2025 provided valuable insights from international regulators. Mariam El Ghandour from Egypt's competition authority shared their hybrid legal framework for addressing bid rigging, while Rachel Burgess from Australia's ACCC discussed recent regulatory enhancements, including heavier penalties and expanded protections for small businesses.

Way Forward

The forum concluded that achieving healthy business competition requires a multi-stakeholder approach. KPPU's Vice Chairman emphasized the need for new regulatory "breathing space" through bottleneck removal, investment facilitation, and cross-agency collaboration leveraging technology. Without these strategic steps, Indonesia's digital economy risks becoming merely a market for global players rather than nurturing local businesses.