Coming Soon: Consumer Protection Laws for E-Commerce Transactions

The Vice Minister of Trade (who is going to be shifted as Vice Minister of Finance), Mahendra Siregar, stated that the Ministry of Trade and the Ministry of Communication and Informatics will establish a regulation on consumer protection in online trading - or known as e-commerce. In a seminar in Jakarta, Siregar stated generally that the adoption of e-commerce is spreading fast, but the mechanism for fraud protection is not yet in place – the most common case is failure to pay when the items have been delivered.

According to Mahendra as cited by Okezone, the regulation is required to ensure legal protection especially since e-commerce involves international trade. “We can't allow issues in export trade through e-commerce to affect country risk or brand image which may lead to the perception that Indonesian economy poses a high risk."

Siregar is concerned that the parties in e-commerce may not necessarily be familiar with the trading mechanisms in e-commerce. As reported by Tempo Interaktif, Siregar assures that the forming of the regulation will involve those who are involved in online trading. "We do not want to burden e-commerce with too many regulations that obstruct its growth.”

As online transaction becomes more popular and seamless, it's about time for some form of regulation to exist which protects consumers from potential fraud and criminal acts. Certainly the regulators need to first understand the process and the risks involving consumers and electronic commerce, to be able to produce an effective legal shield that allow positive growth of online trading in Indonesia.

The laws on e-commerce transactions have previously been included in UU ITE.