The second amendment to Law No. 11 of 2008 on Electronic Information and Transactions (“2nd Amendment”), passed on 2 January 2024, is expected to bring more clarity to a number of provisions as well as to address the developments in the sector.
This newsletter discusses the provisions that significantly affect electronic system operators (locally known as Penyelenggara Sistem Elektronik – “PSE”) i.e., those provide, manage, and/or operate electronic systems for users/customers.
- International Electronic Contracts
The 2nd Amendment now requires international electronic contracts meeting any of the following elements and those with standard clauses (klausula baku) to be made in clear and plain Indonesian language and governed by Indonesian law:
- is entered into by a user that is based in Indonesia and who gives its consent in territory of Indonesia;
- the PSE has a place of business or conducts business activity in Indonesia; and/or
- is implemented in territory of Indonesia.
As a consequence of having Indonesian law as the statutory choice of law, it is now crucial for international PSEs to observe all limitations under the applicable Indonesian consumers laws, including in relation to standard clauses contract.
- Protection of Minors
With the increasing number of child users, the 2nd Amendment brings more protection to minors by now requiring PSEs to: (i) provide age limitation information; (ii) provide a verification mechanism for child users; and (iii) prepare a reporting mechanism for child users, parents or guardians to report on misuses of products, services or features of electronic system.
- Illegal Content and Role of PSEs
Unlike in the past whereby a PSE could take a more passive role, the 2nd Amendment now requires PSEs to proactively conduct content moderation or, to the extent possible, deny access of users to electronic platforms that contain illicit content (such as those related to pornography, gambling, and other content that may be harmful).
- Specific Industry – Peer to Peer Lending Debt Collection
If your business falls within the scope of peer-to-peer lending platform (“P2P”), you should observe new provision of the 2nd Amendment for debt collection mechanism which now aligns with the rules of Financial Service Authority (OJK). For example, throughout the debt collection process, all P2P companies must comply with the debt collection rule (despite the actual collection is conducted by using a third party’s service) and ensure to carry out debt collection without the use of threats, abuses (verbal or physical), or any other defamatory actions.
If you would like to know more about this newsletter or further analysis on the provisions of the 2nd Amendment, please contact us at the following details: firstname.lastname@example.org or reach out to any of our lawyers in this newsletter.