E-Commerce Regulation Changes in Indonesia
Introduction : The rapid development of e-commerce has led to changes in the way businesses connect with consumers across borders through digital marketplaces, providing businesses with the opportunity to enter foreign markets without having to set up physical stores or circulation systems. But at the same time, these same platforms have a huge impact on how sellers are determined, how goods are existing, how consumers decide about purchases, and how disputes are handled.
In light of the above, it raises an interesting question: To what degree should a digital marketplace be responsible for the transactions conducted on its platform ?
The regulatory response to this challenge has been enhanced in Indonesia recently. Minister of Trade Regulation No. 19 of 2026 Concerning Trading through Electronic Systems, enacted on 8 June 2026, is the current regulation. It replaces Permendag No. 31 of 2023, and provides a legal basis for electronic commerce of different models, such as marketplaces and others. In particular, it aims to ensure greater clarity in relation to the rights, duties, and responsibilities of the parties involved in digital commerce, as well as to enhance consumer protection and governance of online trading.
All the above is especially relevant for foreign companies. An Indian brand launching its product on a digital marketplace in Indonesia should not only be sure that the product is legitimate.
Legal Provisions
Permendag 19/2026
Permendag 19/2026 is the main law set out by the Ministry of Trade regulating trading using electronic systems in Indonesia. The regulation covers many digital business models such as online retail, marketplace, online classifieds, price comparison site, daily deals, social commerce, and ride-hailing, and online travel agencies.
It aims at creating responsibility for different business models and deals with issues such as product information, seller information, consumer complaints and supervision.
Product Information and Safety
Article – 15 provides that traders have to provide information about the origin of products and proof of conformity with regulations. The product can be accompanied by an SNI certificate or registration, halal certification, safety, health or environmental registration, and the necessary pharmaceutical or food registration.
More importantly, it is not only the requirement for the seller but the obligation of the electronic commerce operator or PPMSE to provide this information.
Seller Status and Verification
Article 16 allows marketplaces to give labels describing the official status, credibility or characteristics of sellers, such as “official store”, “authorised store”, “flagship store”, “mall”, “star seller/best seller” and “official partner”. In case such a label represents the official relationship between the seller and brand owners, producers, distributors or authorized agents, then there should be relevant information.
Legal Analysis
Seller Verification and Accountability on the Marketplace
In a conventional purchase, the buyer is generally able to trace the seller. However, when the context of the sale is a marketplace, the buyer might have a direct connection with the platform while the actual seller is a third-party merchant in a remote location.
Hence, seller verification is one of the necessary components of consumer protection.
The introduction of the terms “official store” and “authorized store” within Permendag 19/2026 is an example of the necessity of accurate presentation of a seller’s connection with the respective brand or manufacturer.
Marketplaces are obligated to present seller-related information not as promotion but brands have additional responsibilities regarding monitoring of the sellers and preventing misleading representations from the part of the third parties.
That is relevant for Indian brands which enter the Indonesian market. The brand should be able to keep track of authorized distributors and sellers and handle any misleading information about that.
Product Safety and Compliance
Product safety is yet another critical obligation in the realm of digital business.
According to Article 15, all information on product origin and relevant standards shall be presented, and PPMSE is required to assist with the process of presentation.
Such an article is critical for foreign companies due to the fact that adherence to Indian regulations does not necessarily imply adherence to Indonesian standards. Therefore, before entering the Indonesian market, an Indian brand has to analyse Indonesian standards on certification, registration, labelling, and product safety.
This article is especially important in those industries where there are regulated products, namely food, cosmetic, pharmaceutical, etc. It means that product compliance should be taken into account before entering the market and not when a product becomes the object of dispute.
Ranking Transparency and Algorithmic Influence
Online marketplaces wield considerable power in influencing consumer decision-making through the way they search for, recommend and show products. As a result, algorithms used to rank products, paid listings, and algorithmic recommendations may have significant impacts on the visibility of a merchant.
However, the following question arises: when does a platform algorithm turn into a competitive or consumer protection matter? The question is not academic in Indonesia. In the KPPU case No. 04/KPPU-I/2024, the Indonesian Competition Commission studied allegations of discrimination of courier providers against the affiliated logistics company, Shopee Express, by the platform algorithm. This alleged activity was investigated pursuant to Articles 19(d) and Article 25(1)(a) of Law No. 5 of 1999 on the ground of discrimination and abuse of dominance position. In response to this investigation, Shopee agreed to revise the algorithm and give merchants and consumers the opportunity to choose a courier service freely. According to an assessment published in July 2026, the intervention had a large economic impact although there were still concerns related to algorithmic influence.
Even though the case deals with choosing the courier service and not product rankings per se, the case shows that algorithms that significantly influence business decisions may come under competition law scrutiny.
Consequently, for Indian brands it is crucial to know how the Indonesian marketplace ranks, recommends and promotes products.
Consumer Redress
Protection of consumers does not end once the sale transaction takes place. Consumers may encounter faulty goods, wrong delivery, misleading description of goods, non-issuance of refunds and other transaction-related issues.
In cross-border e-commerce, the issue becomes even more complex with the need for the consumer to communicate with foreign vendors, local distributors, and the marketplace at the same time. This is the reason why Permendag 19/2026 emphasizes the importance of complaint and dispute resolution mechanisms. Overall, the goal of the regulation is to clarify the responsibility of the participants in various digital commerce models.
Consumer redress goes beyond just making available a means to contact. Consumers must be able to know where they can send their complaints, how disputes relating to refunds, faulty goods and other transaction failures will be resolved.
For Indian brands operating in Indonesia, there must be clear demarcation of responsibility for complaints, refunds, returns, defective goods and recalls among the brand, distributor in Indonesia and marketplace.
Relevant Case Laws
PT Tokopedia v. Deden Gumilar – Supreme Court Decision No. 553 K/Pdt.Sus-BPSK/2025
The PT Tokopedia vs Deden Gumilar case happened in the course of a consumer dispute related to an online market transaction. The classification by Tokopedia was dismissed by the Supreme Court in 2025.
The case demonstrates that consumer disputes may arise from online market transactions and become part of the formal consumer protection process. It highlights the need for proper complaint handling procedures for companies participating in the e-commerce industry in Indonesia.
Implications for Indian Brands Utilising Indonesian Platforms
The Indonesian regulatory reforms will directly affect Indian firms considering Indonesian online marketplaces as an entry route.
- First, local product compliance should be ensured. Indian brands should not think that any certification/licence/approval in India would be sufficient for the Indonesian market. Indonesian standards/registrations/labelling for the product should be identified prior to listing.
- Second, the authorised seller ecosystem should be managed by brands. Indian firms should know who are the authorised Indonesian distributors and check marketplace listings to find those sellers which present themselves as the authorised representatives.
- Third, platforms’ practices should be a part of the due diligence of the Indian brands. The ranking and promotion of the products through platform algorithms and associated services should be known.
- Fourth, the consumer redress should be arranged in advance. Contracts between the Indian brand, Indonesian distributor and marketplace should establish who would be responsible for the complaints, refunds, returns, defective products and recalls.
- Finally, compliance should be considered a continuous process. E-commerce regulation is evolving in Indonesia together with emerging business models and technology, which means that Indian brands should follow it continuously even after market entry.
E-Commerce Market-Entry Checklist for Indian Brands
Prior to entering the Indonesian e-commerce market, Indian brands must:
- Check for product compliance with safety, certification, labelling and registration requirements of Indonesia.
- Validate seller/distributor status, especially when the seller is described as an “official” or “authorised” one.
- List products accurately, including the country of origin, product specifications, and compliance requirements.
- Examine the platform policies, including ranking, recommending and advertising the products.
- Provide consumer redress measures for complaints, returns and faulty products.
- Specify liabilities for both the brand and the Indonesian distributor.
- Control counterfeit and unauthorised listings and ensure compliance with regulations.
Conclusion
The regulation in terms of product information and seller status proves that the compliance of the marketplace now involves much more than just offering the platform for carrying out the transaction. On the other hand, the Shopee algorithm case and the TikTok-Tokopedia acquisition illustrate that platform behaviour, algorithms and market power may be scrutinised within the context of Indonesian competition law.
Thus, when entering the Indonesian market via a marketplace, the brands from India need to consider this as not only a business but also a regulatory issue. The matters of product compliance, seller authorisation, platform behaviour and consumer protection should be considered prior to entering the market. Businesses integrating local regulatory due diligence into their market entry strategy will be in a better position to build consumer trust, mitigate platform-related risks and establish themselves in Indonesia’s rapidly growing digital economy. The regulation in terms of product information and seller status proves that the compliance of the marketplace now involves much more than just offering the platform for carrying out the transaction. On the other hand, the Shopee algorithm case and the TikTok-Tokopedia acquisition illustrate that platform behaviour, algorithms and market power may be scrutinised within the context of Indonesian competition law.
Thus, when entering the Indonesian market via a marketplace, the brands from India need to consider this as not only a business but also a regulatory issue. The matters of product compliance, seller authorisation, platform behaviour and consumer protection should be considered prior to entering the market.
Author:- Ishita Jain, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or IP & Legal Filing.
References
- Indonesia Competition Commission (KPPU), Case No. 04/KPPU-I/2024, PT Shopee International Indonesia & PT Nusantara Ekspres Kilat.
- Permendag No. 19 of 2026, Article 15 — Information concerning goods/services and applicable standards.
- Permendag No. 19 of 2026, Article 16 — Marketplace labels including “official store” and “authorized store”.
- PT Tokopedia v. Deden Gumilar, Supreme Court Decision No. 553 K/Pdt.Sus-BPSK/2025.
