Trade Through Electronic System

Introduction

The government of the Republic of Indonesia has ratified a Government Regulation Number 80 of 2019 on Trade Through Electronic System (“GR No. 80/2019”). GR No. 80/2019 is issued as an implementation for Law Number 7 Year 2014 on Trade (“Trade Law”) with an objective to improve the protection and supervision of e-commerce as well as its practitioner by the principles of goodwill, prudence, transparency, trustworthiness, accountability, balance and fairness. With the enactment of GR No. 80/2019, every business actor involved in E-commerce shall comply with the provisions of GR No. 80/2019 in no more than 2 (two) years after the enactment of GR No. 80/2019.

E-commerce is defined as trade for which its transaction is conducted through a set of electronic systems and procedures. In GR No. 80/2019, trade is defined as an order of activities related to the transaction of goods and/or services domestically and beyond country borders for the purpose of transferring the right to goods and/or services to obtain reward or compensation.

Parties Involved

E-commerce can be conducted by domestic and foreign business actor, consumers, individuals, and state agencies. Business practitioner encompasses: (i) Merchants, (ii) E-commerce Operators (“PMSE Operator”), and (iii) Intermediary Service Organizers.

Domestic business actor, including PMSE Operator may be in the form of individual or business entity, which is established and domiciled in Indonesia. While, the qualification of foreign business actor must fulfill the criteria, namely: (i) number of transactions, (ii) value of transactions, (iii) number of shipping packages, and/or (iv) the number of traffics and visitors are deemed as fulfilling the physical presence and conducting permanent business activity in Indonesia.

Requirements of E-commerce

The parties involved in E-commerce shall have, enter or submit the clear identities as legal subjects. Any cross-border E-commerce must comply with prevailing regulations on export or import, and electronic transactions and information.

Obligations of Business actor

Merchants which conduct E-commerce by using facilities owned by PMSE Operator is obliged to comply with its terms and conditions in accordance with the service quality standards which were agreed upon and provisions of laws and regulations. Furthermore, E-commerce operators must:

  1. prioritize the use of Indonesian top-level domain (.id).
  2. prioritize the use of internet protocol address (IP address).
  3. use server device which is placed in the data center.
  4. carry out electronic system registration.
  5. comply with provisions on technical requirements established by the relevant agency and secure reliability certificates.
  6. periodically submits data and/or information to the government agency in charge of government affairs in the field of statistics.
  7. comply with provisions of other sectoral laws and regulations relating to the licensing of e-commerce.

In addition, PMSE Operator is obliged to act quickly to remove the electronic links and/or content of illegal electronic information after obtaining any knowledge about it. Moreover, business actor shall provide complain service for consumer, that containing at least:

  • complain address and contact number.
  • consumer complain procedure.
  • complain-follow up mechanism.
  • officers who are competent in processing complaint service.
  • timeframe for resolving a complaint.

Electronic Contract

Electronic contract is a form of agreement of the parties in the PMSE, which can be downloaded and/or stored by consumers. Electronic contracts that are addressed to the consumers in Indonesia must use the Indonesian language.

An electronic contract may be in the form of sale and purchase agreement or license agreement. For sale and purchase agreement, electronic contract shall contain:

  • identity of the parties.
  • specification of goods and/or services that has been agreed upon.
  • the legality of goods and/or services.
  • value of trade transactions.
  • requirements and payment terms.
  • operational procedures for the delivery of goods and/or services.
  • procedures for returning goods and/or services in the event that there is a mismatch between goods and/or services that are received and agreed upon.
  • procedures for cancellation by the parties.
  • legal options for e-commerce dispute resolution.

If an electronic contract is a license agreement, then an electronic contract must contain (i) end-user license, (ii) license for alteration, development or modification, (iii) public license, (iv) license to share, and (v) relicensing. Other than that, the electronic contract shall be valid and binding for the parties if:

  • it is in accordance with the terms and conditions under the electronic offering;
  • suitability between the information listed in electronic contract and listed in the electronic offering;
  • there is an agreement between the parties on the terms and conditions of offering;
  • conducted by legal subjects that are legally capable;
  • there are specific things promised;
  • not contrary the prevailing regulations, morality and public order.

The electronic signature may be utilized as a sign of approval of the parties in E-commerce.

Personal Data Protection

PMSE Operator shall store personal data in accordance with the personal data protection standards of APEC Privacy Frameworks. Personal data owner has the right to ask the data deletion on the system, if the personal data owner intends to leave, stop subscribing or using E-commerce services and facilities.

Payment

The payment can be done electronically through a banking system or other electronic payment system. PMSE Operator can cooperate with a payment system provider.

Delivery of Goods and Services

In every delivery, business actor shall ensure the security, feasibility, confidentiality, conformity and punctuality of the goods and/or services in accordance with the electronic contract.

Delivery of digital goods/services is considered valid if it has been received in full and has been proven to be properly installed and/or operational in accordance with technical use instructions.

Exchange and Cancellation

Business actor, either domestic or foreign, shall provide at least two business days since the goods and/or services has been received by the consumer, to exchange or cancel, if:

  • the goods/services that is delivered is incorrect and/or not appropriate;
  • the actual period of deliver is incorrect and/or not appropriate;
  • hidden defects;
  • damaged; or
  • expired.

PMSE Operator shall provide a mechanism that is able to ensure the return of consumer’s funds.

Dispute Resolution

If there is a dispute, the parties may choose the dispute resolution forum, either through (i) court, (ii) online dispute resolution, (iii) other mechanism, or (iv) Consumer Dispute Settlement Agency. If the dispute contains an international element, the applicable law is based on the principle of international civil law.


Aphrodite El Matyn

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