Hisbah 4.0 for a Fair Market
Hisbah 4.0 for a Fair Market
In two previous articles in CNBC Indonesia—“Business Competition from an Islamic Economics Perspective” (2/3/2026) and “A Healthy Market, a Truly Free Market” (11/3/2026)—two layers of foundation have been established. First, Islam regulates not only what is traded but how the market operates. Second, the five principles of mabadi’ khaira ummah (principles of the best community) are not merely spiritual ornaments but institutional architecture that makes markets truly free from manipulation, distortion, and predation.
We now face a third layer that is far more complex: how these principles apply when “market” is no longer a physical space that a muhtasib (market inspector) could inspect, but an algorithmic ecosystem operating 24 hours a day, invisible to the eye, and moving faster than any regulatory capacity.
Giant global platforms such as Amazon, Google, and Meta—alongside regional players like Gojek, Grab, or Shopee—are no longer merely technology service providers. These platforms have transformed into new market infrastructure that controls access for millions of business operators. And as with all other vital infrastructure, the question of who controls it and for whose benefit is fundamental to our political economy today.
The Trap of Networks in the Digital World
There is a fundamental paradox in platform economics. The more users who join, the greater the platform’s value—what economists call network effects (Katz & Shapiro, 1985). The paradox lies in this: the same advantage that makes a platform useful for users also becomes an almost impenetrable wall for new competitors.
This is what makes the digital market structurally different from conventional markets. A cheaper and higher-quality trader in a traditional market can always attract customers. However, on digital platforms, even more innovative newcomers can fail entirely not because they lose on quality, but because they cannot build critical mass (the minimum scale of users required) on both sides of the market simultaneously—between consumers and merchant partners—without the enormous capital possessed by only a handful of players.
From a jurisprudential perspective, such market power concentration potentially conflicts with the principles of ’adl (justice) and maslahah ’ammah (public welfare). Not because platforms are illegal, but because the structures they create systematically close doors for small business operators without access to comparable funding.
It should be noted that digital platforms also bring significant benefits: they create new access for SMEs previously isolated from the national market. McKinsey (2018) noted that the expansion of Indonesian e-commerce enabled small business operators to reach consumers throughout the archipelago and generated savings of 11-25% for buyers outside Java. However, these benefits do not eliminate the structural challenges that need to be addressed.
Collusion Without Words, Algorithms Speaking
A trickier challenge comes from the algorithmic behaviour itself. In the article “Business Competition from an Islamic Economics Perspective”, it was discussed how Islam forbids najsy (false offers and price manipulation) and al-ghisysyu (deception about product facts or product information falsification). Now imagine both practices occurring at a scale of millions of transactions per second, not committed by humans who can be prosecuted, but by machines that have no intent.
This phenomenon is called algorithmic collusion. When several platforms use machine learning–based pricing systems, independently designed algorithms can converge to produce high prices that benefit all platforms—without a single business operator ever picking up the phone to conspire (Ezrachi & Stucke, 2016).
Conventional competition law requires evidence of a “meeting of minds” or concerted action between parties. Ironically, algorithmic collusion fundamentally obscures this requirement. Law No. 5/1999 (Antimonopoly Law), which forms the foundation of the KPPU’s work, was designed for the manufacturing industry era—long before this one. Not because it was wrong, but because it could not anticipate a world that did not yet exist. This is why updating the legal framework is not merely a technical choice but a structural urgency.
On the other hand, fake reviews and digital reputation manipulation are modern forms of najsy that are actually more dangerous than the classical version—because their scale is massive, their anonymity is maintained, and their impact directly influences the choices of millions of consumers every day.
Luca’s research (2016) showed that one additional star on a review platform can increase a seller’s revenue by up to 9%. The incentive to manipulate is thus very substantial. In Indonesia, this practice is rampant—especially on e-commerce platforms and review-based services—although law enforcement remains limited because of the difficulty of proof.
The Price War That Destroys
There is one phenomenon that is most difficult to detect: predatory pricing. Unlike conventional predation—where an already large giant destroys small competitors—here, conversely, a newcomer with billions of dollars in backing sets prices extremely low, even free, to exclude local business operators without access to comparable funding.
On the surface, this strategy appears pro-consumer: cheap prices, abundant service. However, the principle of la dlarara wa la dlirar (there should be neither harm to oneself nor to others) captures something that short-term price analysis cannot see: systematic damage to the ecosystem of local SMEs that lack the resilience to face “unlimited money-burning warfare”.
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