Sumitronomics 4.0: Reshaping Competition in the Platform Economy

In recent years, global business competition has been marked by increasingly close legal scrutiny of digital technology giants. Google, for example, has faced competition-law compliance tests in several jurisdictions, including the United States (US), the European Union (EU) and Indonesia.

Although the legal instruments used vary, the underlying economic debate centres on the same question: how can the market power of digital platforms be controlled so that market access remains open and innovation can grow, without allowing dominant players to lock in their ecosystems?

This question goes beyond conventional law enforcement and touches on the foundations of the national economic order. This is where Sumitronomics 4.0, a reassessment of the thinking of Professor Sumitro Djojohadikusumo, becomes relevant to formulating fair, adaptable and sovereign digital competition policy.

The paradox of market power and the platform economy

Modern competition law has long moved on from the simplistic view that a large market share automatically harms consumers. Market share is only an initial indicator. The main focus of competition analysis is the extent of market power, how that power is exploited, and whether potential competitors have an open opportunity to enter and grow (market contestability).

In the platform economy, competition analysis is far more complex. Rochet and Tirole (2003) explain that two-sided platforms connect interdependent groups of users. This phenomenon generates strong network effects and a virtuous cycle: the larger the user base on one side, the more attractive the platform becomes to users on the other.

The extensive collection of data from user interactions is then used to improve the precision of algorithms and the quality of services, ultimately further strengthening the platform’s position. The OECD (2022) has highlighted how the combination of network effects, economies of scale and high switching costs often drives market concentration naturally, while creating very high barriers to entry for new players.

The greatest risk arises when a platform has a dual role: it is both a provider of market infrastructure (a market maker) and a competitor to businesses that depend on it.

In this position, practices such as self-preferencing, access discrimination, restrictions on interoperability and manipulation of the architecture of choice can undermine competition. As Lina Khan (2017) argues, competition oversight must therefore look beyond short-term consumer price indicators and examine the structure of power and control over the architecture of digital markets.

Three jurisdictions, three different paths

Developments in Google cases across three jurisdictions illustrate differing enforcement paradigms for responding to platform dominance. In the US, the Department of Justice (DoJ) has pursued ex-post judicial enforcement under the Sherman Act. Following an August 2024 ruling that found Google had violated Section 2, the court issued a Final Judgment on 5 December 2025.

The court prohibited certain exclusive distribution agreements, required Google to provide eligible competitors with access to index and user-interaction data, and opened up the syndication of advertising and search. Although it did not require the structural separation (divestment) of Chrome, these remedies are focused on restoring contestability in the general search market.

The EU has chosen a prescriptive ex-ante approach through the Digital Markets Act (DMA). The European Commission designates gatekeepers and directly imposes obligations on their conduct. On 23 July 2026, the Commission imposed a total fine of €890 million on Google: €460 million for self-preferencing in Google Search and €430 million for restricting consumer steering in Google Play.

Indonesia has taken a case-based, ex-post enforcement approach. On 21 January 2025, the Business Competition Supervisory Commission (KPPU) ruled that Google LLC had violated Article 17 and Article 25(1)(b) of Law No. 5 of 1999 (the Anti-Monopoly Law) in connection with its requirement to use Google Play Billing.

The KPPU imposed a fine of Rp202.5 billion and ordered Google to end the single-payment requirement and offer a User Choice Billing option. The Supreme Court upheld the decision by rejecting Google’s appeal in March 2026, making it legally final.

The comparison shows that the success of competition policy is not determined simply by the distinction between ex-ante and ex-post approaches. Effectiveness should be measured by the speed of response, the quality of economic evidence, investigative capacity, and the real impact on lowering barriers to entry and increasing consumer choice.

The Sumitronomics prescription: preserving openness without dependence

Professor Sumitro’s thinking finds a modern expression here. From the 1951 Economic Urgency Plan onwards, Sumitro advocated industrialisation with an active role for the state. Later experience, including his criticism of leakages in development budgets, taught that state support without competition discipline can easily turn into rent-seeking.

The state and the market are not opposing poles that cancel each other out, but a structured partnership: the state does not take over economic activity, but acts as a firm referee to ensure that open markets do not become structural dependence.

In the digital context, Indonesia’s oversight framework needs updating. Law No. 5 of 1999 assesses dominance by market share (50 per cent for one business, 75 per cent for two or three), while asset or sales thresholds apply only to merger and acquisition notifications.

Both measures are inadequate for global platforms operating in zero-price markets, where local market share and turnover can be difficult to measure. Assessments of market power should rely on new indicators: the degree of local businesses’ dependence (the lock-in effect), control of strategic data, the scale of switching costs and the platform’s control over the gateway to consumers.

That does not mean Indonesia should copy the DMA wholesale. Each obligation must take account of the characteristics of the domestic market and legitimate efficiency justifications. An integrated payment system, for example, may offer benefits in security, service integration and transaction control.

Those benefits, however, must be tested against evidence: are the charges proportionate to the value of the service, and are there alternatives that allow developers to retain choice without compromising transaction security?

Remedies should therefore be proportionate and evidence-based. Depending on the case, interoperability requirements, data portability, transparency in ranking mechanisms, bans on certain forms of self-preferencing or restrictions on exclusivity may be more appropriate. Structural separation becomes relevant only when conduct-based remedies can no longer restore competition.

This modernisation requires a comprehensive strengthening of the KPPU, from improving its capacity in data science and understanding algorithms to auditing digital system architecture. Legislators should also revise Law No. 5 of 1999 to provide an explicit and robust legal basis for oversight of digital markets.

At the same time, as Stigler (1971) noted, regulators must guard against regulatory capture. In the digital economy, the problem is more complex because technology companies possess data, technical expertise and information about their systems that regulators often lack. This information imbalance can weaken the state’s ability to oversee markets, even when formal powers are in place.

Ultimately, digital economic sovereignty is not achieved by shutting out foreign technology, but by ensuring that the competitive arena remains open, fair and contestable, so that businesses in Indonesia have an equal opportunity to grow.