TLDRs;
Contents
- Indonesia blocks eBay, KLM, and Bath & Body Works for failing to register as required under local laws.
- The move reflects a broader trend in Southeast Asia of tightening regulations on foreign digital firms.
- Compliance challenges are rising for international platforms seeking access to Indonesia’s fast-growing digital economy.
- Digital policy in Indonesia increasingly intertwines regulatory enforcement with broader goals like content control and user protection.
Indonesia’s Ministry of Communication and Digital (Komdigi) has moved to block access to several major global platforms, including eBay, KLM Royal Dutch Airlines, and PT Dunia Luxindo, the operator of Bath & Body Works.
The decision, announced over the weekend, follows repeated non-compliance with the country’s Private Electronic System Provider (PSE) registration requirements, which are part of a sweeping digital oversight regime.
Sanctions Signal Strict Enforcement Culture
According to Komdigi’s Director General of Digital Space Oversight, Alexander Sabar, the access restrictions are administrative sanctions authorized under Article 7 of Regulation No. 5/2020.
“Cutting off access to the electronic system or access blocking is a form of administrative sanction imposed by the Minister of Communication and Digital to Private PSE that have not made registration efforts,” explained the Director General of Digital Space Supervision of Komdigi, Alexander Sabar, in a press release Saturday.
While Komdigi stated that the block is intended to ensure fairness among service providers operating in Indonesia, the enforcement has broader implications.
Regional Trends Inform Policy Decisions
Indonesia’s increasingly assertive digital regulatory framework is not being implemented in isolation. Rather, it mirrors similar efforts in neighboring ASEAN countries such as Vietnam and Thailand, where foreign technology companies are also facing tighter oversight.
Since revising its Electronic Information and Transactions Law in 2016, Indonesia has steadily added layers to its digital compliance expectations. These include VAT on digital services, mandatory content moderation policies, and disclosure rules for foreign ownership.
With Indonesia’s digital economy projected to reach up to $360 billion by 2030, the government has clear incentives to enforce rules that ensure data, profits, and governance align with national priorities. However, this pursuit of digital sovereignty has sparked pushback from both consumers and international firms. Indonesia now ranks among the countries with the highest VPN usage rates globally, a sign of rising friction between regulatory restrictions and users’ desire for unfettered access.
Compliance Burden Rises for Foreign Platforms
For international firms, operating in Indonesia increasingly requires navigating a complex and evolving regulatory environment. The latest sanctions against eBay and KLM underscore the risks of falling out of step with local laws, particularly those requiring registration with the Online Single Submission (OSS) system.
Companies must also meet other obligations, including VAT collection and specific data management requirements.
While the government has eased certain rules over the years, such as allowing foreign firms to store data overseas under limited conditions, the overall trend remains toward tighter oversight. U.S. companies, in particular, may face higher compliance costs due to jurisdictional frictions and operational scale. As global brands struggle to keep pace, access restrictions like these highlight how regulatory compliance is becoming an unavoidable part of digital market entry.
Digital Regulation Serves Broader State Objectives
Beyond compliance, Indonesia’s regulatory framework is increasingly tied to wider social and political goals. PSE registration is not just about order, it forms the foundation for greater accountability in areas like content control and data protection.
Authorities now use registration as a tool to enforce local laws regarding harmful content, protect minors online, and mandate the use of Indonesian legal terms in digital contracts.
The country’s digital policy has evolved to encompass both commercial activity and civic responsibility. From early crackdowns on religious and pornographic websites to today’s bans on major global businesses, Indonesia has steadily expanded its notion of what constitutes responsible digital citizenship.