Digital Economy Needs a Legal Framework for Business Competition

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NUSADAILY.COM – JAKARTA – The development of the digital economy in the country is considered to require a legal framework of business competition that can guarantee legal certainty and investment climate.

Chairman of the Indonesia Competition Lawyers Association (ICLA) Asep Ridwan in Jakarta, Monday, stated that the current growth of the digital economy and investment in Indonesia is a valuable momentum and must be maintained.

One of them is by establishing a legal framework that can follow this dynamic while upholding the principles of healthy business competition.

“The legal framework should make room for innovation that can improve Indonesia’s competitiveness as a digital investment destination,” he said.

The digital economy, he continued, makes all parties need to look again at a number of definitions that have been considered standard, such as market definitions. So far, the competition law only covers the product market and geographical market.

“What about the digital market, where products and geos are no longer following the old measures?” he said.

A new understanding of this definition is important, Asep added, because it will determine the market in question or relevant market that becomes the basis in a case of business competition.

A clear and relevant definition, according to him, is needed to maintain legal certainty.

According to a report compiled by Temasek, Google, and Bain & Co in 2019, the estimated growth rate of the digital economy in Indonesia reaches 49 percent per year.

As the largest growing internet economy in ASEAN, Indonesia is predicted to surpass USD130 billion by 2025. With a growth focus on the e-commerce and ride hailing sector or popularly called online transportation.

The Digital Economy Benefits
The digital economy also benefits all sectors because it is supported by digital payments, which are now increasing.

In addition to the high expectations on the rules and institutions in the enforcement of business competition law, in this case the Business Competition Supervisory Commission (KPPU), businesses also have a responsibility to mitigate risks, through the preparation of lists or guidelines of conduct in business competition matters.

“So companies need to have guidelines or checklists when they want to do a business maneuver. Whether it potentially violates business competition law or not. This will help and avoid them from legal problems,” advises Asep

Earlier in the discussion “Digital Economy Business Competition: Investment Opportunities and Challenges in Indonesia” Deputy for Investment Cooperation Development, Investment Coordinating Board (BKPM), Riyanto explained the huge investor interest in the digital economy sector from giant players such as Alibaba, Amazon Web Services (AWS), Google Cloud, and Microsoft. These big names are interested in developing data centers.

“There are a number of ease of doing business in order to maintain the momentum of this digital investment, such as simplification / simplification of business licenses, delegation of permits from various ministries and institutions into one door in the BKPM, tax holiday, and exemption of import duties,” he said.

Trisakti University Faculty of Law Lecturer Anna Maria Tri Anggraini said all stakeholders are now facing a change in business model. With the presence of the digital economy and its dynamics.

“It is necessary to guarantee legal certainty in investing and utilizing digital services, such as transacting, through related regulations” he said.

He added that stakeholders in business competition can take lessons from various cases of business competition in Indonesia, such as Netflix, Grab, and other cases in order to find the right format of business law enforcement amidst the development of the digital economy. (lal)