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Indonesia: Amendment to the Electronic Information and Transactions Law

On January 2, 2024, the Indonesian Government officially enacted Law No. 1 of 2024 on the Second Amendment to Law No. 11 of 2008 on the Electronic Information and Transactions (the Electronic Information Law) (the amendment). 

The revision of the Electronic Information Law was driven by a desire to establish a greater sense of public justice and legal certainty. The need for this revision became apparent as the prior version led to multiple interpretations and controversies within the community. The amendment reflects the Government's commitment to adapting to the changing landscape of digital transactions and online activities within the country. Overall, the Electronic Information Law is designed to protect individual rights in online spaces, regulate electronic transactions, and employ punitive measures to uphold its provisions. 

Specifically, the amendment made changes to various provisions in the previous draft. These changes include enhancing the protection of minors in electronic systems access and specifying the governing law for international electronic contracts. Teguh Darmawan, from Hogan Lovells, discusses the key highlights of the amendment to the Electronic Information Law.  

D3Damon / Signature collection / istockphoto.com

Protection of minors in electronic systems access 

The recent amendment brings forth new provisions aimed at ensuring the protection of children using electronic systems. Electronic System Providers (ESPs) are now obligated to furnish comprehensive information, including: 

  • details regarding the minimum age criteria for children eligible to utilize their products or services; 
  • implementation of a verification mechanism tailored for child users; and 
  • establishment of a reporting mechanism for instances of misuse involving products, services, and features that violate or have the potential to violate the rights of children. 

The newly introduced provision underscores that, according to the amendment, ESPs are obligated to prioritize child protection over commercial interests. The scope of child protection encompasses safeguarding personal data, privacy, and the overall safety of the child - both physically and mentally - against the misuse of electronic information and/or documents that infringe upon the child's rights.  

Notably, the amendment to the Electronic Information Law places a distinct emphasis on prioritizing child protection, even at the expense of the commercial interests of the ESP. This reflects a noteworthy alignment with the approach taken by countries in Europe and the US, indicating the Government's intention to establish a protective framework in online spaces towards children. 

Further clarification within the provision emphasizes that non-compliance with these requirements may lead to sanctions, such as written warnings, administrative fines, temporary suspension, and/or termination of access for the ESP. 

The governing law of international electronic contracts

The amendment to the Electronic Information Law also introduces new provisions relating to the applicability of Indonesian law. International electronic contracts using standardized clauses will be subject to Indonesian law if: 

  • the service user, as one of the electronic transaction parties, originates from Indonesia and consents within its jurisdiction; 
  • the contract is executed within Indonesia; and/or 
  • the ESP has a place of business or conducts electronic transactions within the Indonesian jurisdiction. 

If an ESP fulfills any of the specified requirements, the international electronic contract it enters into shall be subject to Indonesian law, with its application extending to cover dispute resolution. Moreover, the electronic contract must be written in language that is straightforward, clear, and easily comprehensible while also upholding the principles of good faith and transparency. 

This provision is designed with the intention of safeguarding ESP users in Indonesia by ensuring their access to an effective and efficient legal system when utilizing the services or products offered by the ESP. The precise details of how this provision will be put into practice remain uncertain, as it is still in the early stages of development. 

Conclusion

It is interesting to closely monitor the implementation of the newly introduced provisions under the amendment to the Electronic Information Law as they hold significant implications for the protection of children, the governance of international electronic contracts, and the overall legal landscape surrounding electronic transactions in Indonesia. 

Teguh Darmawan Counsel 
[email protected]
Hogan Lovells, Jakarta 

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