New e-commerce regulation introduces new requirements for social commerce platforms and imported products in Indonesia

E-commerce operators carrying out cross-border e-commerce (eg importing goods into Indonesia) must set a minimum price of US$100 per unit FOB (Freight on Board) for finished goods sold directly from outside Indonesia into Indonesia on their platforms. The MOT may exempt certain goods from this minimum price requirement in coordination with relevant government ministries and agencies.

• E-commerce operators must play an active role in providing equal business opportunities to merchants and in ensuring that prices of goods and/or services are free from direct or indirect manipulation practices.
• E-commerce operators must apply standard operating procedures (SOP) to supervise, avoid and handle any form of direct or indirect anticompetitive and/or price manipulation practices.
• In implementing these SOP, e-commerce operators must ensure:
  • there is no connection or interconnection between the electronic system used for e-commerce and any other electronic system;
  • there is no misuse of control over user data in its electronic system to benefit the e-commerce operators or their respective affiliates.
• Upon any allegation of anticompetitive practices between merchants and/or price manipulation, whether direct or indirect, e-commerce operators must coordinate with Indonesia’s Competition Commission (Komisi Pengawas Persaingan Usaha or KPPU) within three business days after the allegation becomes known by or is reported to the relevant e-commerce operator.

• All merchants (both onshore and offshore) must display evidence of compliance with the goods and/or service standard certifications applicable to their products, such as Indonesian National Standard (Standar Nasional Indonesia or SNI) registration or certification numbers, Halal certificates, and Food and Drug Product (BPOM) registrations.
• Offshore merchants carrying out e-commerce through onshore e-commerce operators must provide certain information to the e-commerce operators. Onshore e-commerce operators are in turn under an obligation to facilitate compliance by offshore merchants with the requirement set out in (a) above.
• Offshore merchants must also display information on their goods and services in the Indonesian language that is easy to understand, including information on the country of origin.

• Marketplace and/or Social Commerce operators are prohibited from acting as producers (manufacturers), in line with the applicable laws and regulations on distribution of goods. 
• Social Commerce operators are prohibited from facilitating payment transactions on their electronic systems. MOT 31/2023 does not provide further guidance on what constitutes “payment transaction facilitation” but at its press conference, the MOT emphasised that Social Commerce operators are only permitted to facilitate offers or the promotion of goods and services.

• MOT 31/2023 requires business players to prioritise local products, which may be carried out through (among others) ‘Goods Aggregation’ (Agregasi Barang). Goods Aggregation is defined as an activity process covering repackaging, management assistance, warehousing and other activities causing merchants to not send their goods directly to consumers, which has in practice been carried out by some of the e-commerce players.

• Similar to the position under MOT 50/2020, offshore e-commerce operators that meet certain criteria should appoint representatives in Indonesia to act on their behalf. This requires them to establish a Foreign Trade Representative Office in E-Commerce (Kantor Perwakilan Perusahaan Perdagangan Asing di bidang Perdagangan melalui Sistem Elektronik or PMSE KP3A) and obtain a Trading Company Representative Office Business Licence (Surat Izin Usaha Perwakilan Perusahaan Perdagangan or SIUPPP).
• MOT 31/2023 introduces a new criterion that triggers the registration requirement, as shown below:
  • having transactions with at least 1,000 consumers within one year;
  • having delivered at least 1,000 packages to consumers within one year; and/or
  • having traffic of, or being accessed by, at least 1% of internet users in Indonesia within one year (new criterion).

For business registration in Indonesia, the following business lines (KBLI codes) are now specifically required to be used for e-commerce related business:

• KBLI for retail through post or internet order (KBLI code 4791) is applicable to business licences of domestic merchants that only carry out online sales through electronic systems.
• KBLI for web portal or digital platform for commercial purposes (KBLI code 63122) is applicable to business licences of domestic e-commerce operators.

MOT 31/2023 also requires e-commerce operators to actively ensure compliance with business licensing requirements by onshore and offshore merchants, as prescribed in the regulation.