Why the Copyright Law Revision Must Firmly Protect Software
Indonesia wants to become a digital economic power. The government has consistently promoted the development of artificial intelligence, data centres, industrial automation, cloud computing, technology-based start-ups, and digital downstreaming as part of the national economic transformation agenda. Yet behind this ambition lies a contradiction that is rarely discussed seriously: Indonesia wants to become a technology-creating nation, but it has not built a sufficiently strong legal ecosystem to ensure that software has economic value and must receive proper and firm legal protection.
The momentum of deliberating the Bill to Amend Law Number 28 of 2014 on Copyright should be used to correct this problem. Copyright debates have recently centred on music, film, digital platforms, content creators, royalties, and works produced by artificial intelligence. All of these are indeed important, but lawmakers must not forget computer programs or software. Software works behind almost all of the digital transformation we are currently celebrating.
Software today is not merely a program installed on a computer. It has become a factor of production. Engineers and architects use it to calculate building structures and models, manufacturing companies use three-dimensional design software to design products, the energy industry uses it to simulate production, researchers use it to process data, and technology companies use it to build the next digital product. Even the development of artificial intelligence itself depends on software, data, and computing infrastructure.
This structural economic change can be seen globally. A World Intellectual Property Organization (WIPO) report, the World Intangible Investment Highlight released on 13 August 2026, recorded that investment in intangible assets of intellectual property, including software, databases, brands and designs, exceeded US$10 trillion in 2025. To understand this simply, the world economy has moved from machines to algorithms, from physical assets to intellectual property assets in intangible form. If the economic structure changes, the way the law protects economic value must also change.
Software piracy can no longer be seen merely as a dispute between copyright holders, sellers, and users. If left unchecked, there will be a domino effect. Imagine two engineering and design firms bidding for the same tender. The first firm purchases design and analysis software officially, with licence fees included in its cost structure alongside engineer salaries, server computers, taxes and other operational costs. The second firm uses the same software without a licence. If the second firm is able to offer a lower price, do not rush to call it efficient. It may simply not be paying for one of its factors of production, namely the economic rights of the software company or the official licence.
Piracy in such conditions works like an invisible subsidy. No budget provides a subsidy and no budget transfer occurs, but the company gains an economic advantage because it uses software without paying its economic value. Compliant companies must bear compliance costs, while non-compliant companies enjoy an artificial cost advantage. If this practice takes place systematically, software piracy becomes a matter of fair competition. A healthy market should reward companies that are more productive and innovative, not companies that can reduce costs by not paying for the technology they use.
The domino effect then emerges. When compliant companies see competitors using illegal software, offering lower prices, winning projects, and facing no meaningful consequences, a dangerous question arises: why pay when non-compliance is more profitable? At that point, infringement is no longer merely individual behaviour. Non-compliance becomes an unofficial but favoured market incentive.
The losses also cannot be calculated solely on the basis of licence prices not purchased. Behind legal software transactions are distributors, resellers, implementation consultants, technical support, user trainers, cloud service providers, digital security consultants, and other workers. They earn income, recruit workers, pay taxes and create economic activity. Unlicensed software cuts part of that chain. What is lost is not only sales value, but potentially the loss of economic activity that could open jobs and drive the digital economy the government has been promoting.
There is also a fiscal dimension potentially lost through software piracy. If software owned by a foreign company enters the formal economy through invoices, payments, company records, distribution, and tax obligations in accordance with applicable regulations, the opposite occurs when a company can use illegal software to produce projects worth billions of rupiah, while the value of one of the factors of production that helped generate that revenue never enters the formal transaction chain.
Software piracy also has a price that must be paid but is not visible. Illegal software uses cracks, patches, key generators, or executable files from sources whose integrity cannot be verified. Such actions open the door for malware, ransomware, and data theft. The cost of recovering from a cyberattack is often far greater than the price of a legitimate licence. In other words, piracy is not a saving; it is a deferred and amplified risk.
The revision of the Copyright Law must therefore be firm in protecting software. Protection must not be limited to civil disputes between rights holders and users. The state must be present to ensure that software as a factor of production is respected in the market mechanism. Without firm legal protection, the digital economy being promoted will stand on a fragile foundation, and the ambition to become a technology-creating nation will remain a slogan.