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Things You Need to Know in the Latest Regulation Concerning E-Commerce

Nowadays, Online shopping becomes a daily life for Indonesian people, even some of them prefer to do online shopping rather than conventional shopping. Changes in shopping habits have led to the development of online shopping provider platforms, known as market places such as Tokopedia, Bukalapak, Shopee and so on.

More numbers of trading through electronic systems or e-commerce exist, inevitably the government must issue some regulations which govern online trading activities. Hence, President Jokowi on November 20, 2019, signed Government Regulation (PP) Number 80 of 2019 concerning Trading through Electronic Systems (PP 80/2019).

PP 80/2019 defines Trading Through Electronic Systems (PMSE) means trading activities whose transactions are exercised through a series of electronic devices and procedures. Whereas the providers of Trading through Electronic Systems, hereinafter referred to as PPMSE, are Business Actors who provide Electronic Communication facilities used for trade transactions. In PP 80/2019, business actors, in this case, traders, and trade providers are differentiated.

In general, things which are regulated in PP 80/2019 related to parties who conduct trading through electronic systems, requirements, operations, obligations of business actors, evidence of trade transactions through electronic systems, electronic advertisements, electronic offers, electronic contracts, protection of personal data , payments in trade through electronic systems, exchange of goods or services and cancellation of purchases, dispute resolution, guidance and supervision.

From the scope of these provisions, it can be seen that PP 80/2019 regulates comprehensively all matters relating to online trading activities. Since a few weeks after it was approved, the regulation has received a lot of public attention, especially related to the obligation to have a business license for online traders. The following are important provisions which need to be known in PP 80/2019.

Parties Who Conduct PMSE

Parties who can conduct PMSE are business actors, consumers, individuals, and state administrative agencies. PP 80/2019 states that PMSE is a private relationship that can be done between:

  1. Business actors with business actors;
  2. Business actors with consumers;
  3. Individuals with individuals;
  4. State agencies and business actors, in accordance with statutory provisions.

The regulation also stated that the PMSE could not only be conducted by domestic businesses, but foreign business actors also could trade through the electronic system in Indonesia. Even foreign businesses which actively offer and/or conduct PMSE to consumers domiciled in Indonesia and meet certain criteria are considered to satisfying physical presence in Indonesia and conduct business activities regularly in Indonesia.

The criteria for satisfied these qualifications are the number of transactions, the value of the transaction, the number of shipping packages and the amount of traffic or access. After fulfilling these criteria, foreign PPMSE must open representatives in Indonesia who act as and on behalf of the foreign business actors.

Obligation to Prioritize Domestic Products

All parties who conduct PMSE are obliged to help government programs, by conducting:

  1. prioritize trade in goods and / or services from domestic production;
  2. increase the competitiveness of domestic products and / or services produced; and
  3. Domestic PPMSE is required to provide promotional space for goods and / or services produced by locals.

Obligation to Obtain Business License

After several years of online shopping activities exist in Indonesia, PP 80/2019 finally requires business actors who conduct PMSE to have a Business License. However, there are exceptions to that obligation. Article 15 paragraph 2 of PP 80/2019 mentions that the obligation to have a Business License is excluded under the following conditions:

  1. Not a party who receives a benefit (beneficiary) directly from the transaction; or
  2. Not directly involved in the contractual relationships of the parties conducting PMSE.

The application of a business license is carried out through an Electronic Integrated Business Licensing System regulated in the Minister of Trade Regulation Number 77 of 2018 concerning Electronic Integrated Business Licensing Services in the Field of Trade.

Provisions on Consumers Protection

PP 80/2019 not only regulates business actors in the PMSE but also regulates consumer protection. The consumer protection procedures regulated in PP 80/2019 are as follows:

  1. Consumers report losses suffered to the Minister;
  2. Business actors reported by consumers must solve the report;
  3. Business actors who do not solve the report will be listed in the priority list of supervision by the Minister;
  4. The priority list can be accessed by the public so that Business Actors will lose the trust of society.

Besides, as a form of consumer protection, business actors are required to provide complaints mechanism for consumers. The services mechanism contains at least:

  1. address and contact number of the complaint;
  2. consumer complaints procedures;
  3. complaint follow-up mechanism;
  4. officers who are competent in processing complaints services; and
  5. the period for resolving complaints.

Proof of Transactions in E-Commerce

Domestic and foreign PPMSE are required to provide and keep valid PMSE transaction evidence. Proof of the transaction is legal if using the Electronic System in accordance with the provisions stipulated in the regulations concerning information and electronic transactions. PMSE transaction evidence can also be used as valid evidence and the application cannot be refused.

It is also stated in Article 30, proof of PMSE transactions can replace written agreements or contracts with the provisions the proof of the transactions can be stored, accessed and displayed for subsequent use so that the substance validly explains a certain legal situation or event.

Data Privacy

PP 80/2019 regulates that any personal data is treated as the private property of the person or business actor concerned. Every business actor who gets consumer’s personal data is obliged to maintain the mandate in storing and controlling it in accordance with statutory provisions. Personal data protection standards must meet at least the following:

  1. personal data must be obtained honestly and legally from the owner;
  2. personal data must be held only for one or more of the purposes described specifically and legally and may not be used other than for that purpose;
  3. the personal data obtained must be appropriate, relevant and not exceed the intended use;
  4. personal data must be accurate and must always be up to date by allowing the data owner to update the data;
  5. personal data may not be held longer than the time required;
  6. personal data must be processed in accordance with the owner’s rights;
  7. the party who stores personal data must have a proper security system to prevent leakage or the illegal use of personal data or damage to personal data;
  8. Personal data may not be sent to other countries or regions outside Indonesia unless the country is declared to have the same standards and level of protection as Indonesia.

If the owner of personal data or consumers declare unsubscribing and stop using PMSE services and facilities, the owner of the personal data has the right to ask business actors to delete all the personal data. Therefore, the business actor is obliged to delete all relevant personal data in the system managed by the business actor.

Delivery, Exchange and Cancellation Mechanisms

The potential that often induces problems in trading activities through electronic systems is in the process of shipping goods, hence to prevent things which are detrimental to the parties, PP 80/2019 also regulates the mechanism of shipping goods. The exchange and cancellation mechanism are also regulated if there is a mistake in the process of packaging to delivering.

In every delivery of goods using courier services or other mechanisms, business actors must ensure:

  1. security of goods;
  2. condition of goods;
  3. confidentiality of goods;
  4. suitability of goods; and
  5. on-time delivery of goods according to the transaction agreement.

Moreover, the regulation mentioned that if there is an error or discrepancy between the period of delivery of the goods and the agreed period which causes disputes between consumers and business actors, then PPMSE is obliged to resolve the dispute.

The mechanism for exchanging or cancelling purchases is determined by a maximum of two working days from receipt of the item. Consumers can cancel and exchange goods in the following conditions:

  1. there is an error or discrepancy of the goods;
  2. there is an error or discrepancy between the actual period of delivery of the goods;
  3. there are hidden defects;
  4. damaged goods;
  5. expired goods.

Consumers who exchange goods are only charged the cost of sending back the goods, while the cost of sending goods back to the consumer can be done if an error occurs due to the inaccuracy of consumers. In the case of cancellation of purchase, PPMSE must provide a mechanism that can ensure consumer refunds.

Dispute Settlement in Online Trading

It is undeniable that disputes or conflicts will occur even in online shopping activities, therefore PP 80/2019 also regulates dispute resolution mechanisms. Mentioned in 72, if there is a dispute in the PMSE the parties can resolve it through the court or other dispute resolution. Dispute resolution can also be done electronically (online dispute resolution).

If the dispute occurs between the consumer and the domestic business actor, then the consumer can file a lawsuit through the consumer’s dispute resolution board or submit it to the judiciary at the consumer’s place of residence.

The principle of freedom of contract is applied in the resolution of disputes which occur in the PMSE because the parties can choose their dispute resolution forum and choose the law to be used if one of the parties comes from abroad.

Administrative Sanctions

Of the many rules mentioned in PP 80/2019, it also regulates administrative sanctions so that PMSE actors comply with all stipulated provisions. These administrative sanctions include:

  1. written warning;
  2. included in the priority list of supervision;
  3. blacklisted;
  4. temporary blocking both PPMSE services domestic and abroad by authorized agencies;
  5. revocation of Business License.

Written warnings are given a maximum of three times within two weeks from the date of the previous warning letter. If the business actor does not make improvements after the third warning letter, it will be included in the priority list of supervision.


From the explanation above regarding important matters that need to be known in PP 80/2019 regarding Trading through Electronic Systems, it can be concluded that PMSE business actors have a lot of homework to be done related to the fulfilment and adjustment of this regulation. It is hoped that after the enactment of this regulation, online shopping activities in Indonesia can further develop and provide legal certainty to all participating parties, especially the citizen as consumers.


Author: Andi Akhirah Khairunnisa

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