Digital Monopoly Measurement: Competition Law Revision Targets Data and Algorithms

The revision of Law No. 5/1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition has been included in the 2025-2029 medium-term national legislation programme. The drafting of the academic paper and the bill itself has been underway since September 2025.

Budi Primawan, Chairman of the Indonesian E-Commerce Association (idEA), stated that the core principles of the existing law, such as preventing monopolistic practices, cartels, and abuse of a dominant position, remain relevant. However, he noted that competition in the digital era is no longer solely about price and market share. Factors like data, algorithms, network effects, and the integration of various services within a single ecosystem now influence market dynamics. He emphasised that the revision must maintain a balance to ensure healthy competition, business certainty, and consumer protection in the digital sector, though idEA has yet to be formally consulted on the bill’s substance.

Ditha Wiradiputra, a lecturer in economic and technology law at the University of Indonesia, outlined four crucial points for the revision. First, the adoption of a pre-merger notification system to allow the Indonesia Competition Commission (KPPU) to prevent anti-competitive impacts before a merger occurs. Second, an extraterritorial expansion of the definition of business actors, enabling the KPPU to address anti-competitive practices by foreign tech platforms affecting the Indonesian market. Third, the introduction of new indicators for market dominance, such as data control and digital ecosystem power, where the KPPU could measure a platform’s user base as a proxy for data dominance. Fourth, redefining the concept of the relevant market to include data control, moving beyond the traditional price and geographical substitution approach, which is inadequate for assessing free digital services.

Aulia Rachman Alfahmy, Executive Director of the Wiratama Institute, argued that the KPPU primarily needs enhanced supervisory authority to examine platform algorithms and ensure symmetric information for consumers. He stressed that while the law cannot be overly technical, it must enable detailed and dynamically adaptable implementing regulations to keep pace with technological change. The revision should also encourage technological investment that makes digital platforms accountable for their algorithms, prevents cognitive biases, and fosters a fair digital ecosystem.

KPPU Chairman Gopprera Panggabean confirmed that revising the 25-year-old law is the commission’s top priority for the next 2.5 years, as the current regulation is inadequate for overseeing competition in the digital economy where market control is also determined by data, platforms, and cross-border activities.