Legal News Update
Contributors: Almaida Askandar, S.H., MBA, Nita Damayanti, S.H., and Clarissa Felicia Hidriani, S.H.
Published on 20 September 2026 by IABF Law Firm, Jakarta, Indonesia.
Indonesia’s New E-Commerce Regulation Introduces Rules on Artificial Intelligence
I. Introduction
On 4 June 2026, the Minister of Trade issued Regulation Number 19 of 2026 on the Operation of Trade Business through Electronic Systems (“Regulation No. 19/2026”), which was promulgated and came into force on 8 June 2026. Regulation 19/2026 revokes and replaces Minister of Trade Regulation Number 31 of 2023 on Business Licensing, Advertising, Guidance and Supervision of Business Actors in Trade through Electronic Systems (“Regulation No. 31/2023”). While Regulation No. 19/2026 introduces several new requirements, it retains certain key restrictions under Regulation No. 31/2023, including the prohibition on marketplace and social-commerce operators acting as producers and the prohibition on social-commerce operators facilitating payment transactions within their systems.
This update highlights four key developments under Regulation No. 19/2026: (i) changes concerning applicable Indonesian Standard Industrial Classification or Klasifikasi Baku Lapangan Usaha Indonesia (KBLI) classifications; (ii) revised licensing requirements for foreign trade company representative offices in the e-commerce sector; (iii) mandatory provisions concerning fees in written agreements and electronic contracts; and (iv) new requirements governing the use of artificial intelligence (AI).
II. Changes to Business Classification Codes
The issuance of Badan Pusat Statistik or BPS Regulation Number 7 of 2025 on the Indonesian Standard Industrial Classification (“KBLI 2025”) changes how merchants and e-commerce operators determine the business classification codes used for licensing, as summarized below.
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Regulation No. 19/2026 and KBLI 2025 |
Regulation No. 31/2023 and KBLI 2020 |
| Merchants: must use the KBLI code corresponding to the goods and/or services they sell. | Merchants: domestic merchants conducting retail e-commerce generally used the retail classifications for sales through mail or internet orders, including codes under KBLI 4791. |
| E-commerce operators: must use the KBLI code corresponding to their actual business activity. Under KBLI 2025, the former KBLI 63122 has been split into 33 activity-specific classifications. These classifications include KBLI 47901 for digital platforms facilitating retail trade. However, the applicable KBLI classification must be determined based on the activities actually conducted by each e-commerce operator. | Domestic e-commerce operators: generally used KBLI 63122 for commercial web portals and/or digital platforms.
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III. Revised Licensing Requirements for KP3A E-Commerce
Both Regulation No. 31/2023 and Regulation No. 19/2026 require a foreign e-commerce operator that meets specified criteria to establish a Foreign Trade Company Representative Office or Kantor Perwakilan Perusahaan Perdagangan Asing (“KP3A”) E-Commerce, which may act for and on behalf of the foreign e-commerce operator in Indonesia. The triggering criteria under Regulation No. 19/2026 remain substantively unchanged. Specifically, Regulation No. 31/2023 and Regulation No. 19/2026 both provide that the requirement is triggered if, within a one-year period, a foreign e-commerce operator has conducted transactions with at least 1,000 consumers, delivered at least 1,000 packages to consumers and/or accounted for at least 1% of Indonesia’s domestic internet traffic.
Regulation No. 19/2026 expands and updates the documents required to obtain a business licence for KP3A E-Commerce. The revised requirements include, among others:
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- a legalized copy of the company’s constitutional or incorporation documents, prepared in accordance with the laws of the foreign e-commerce operator’s country of origin;
- a deed of establishment prepared in accordance with the laws of the foreign e-commerce operator’s country of origin; and
- a self-declaration concerning security, safety, health and environmental sustainability (K3L).
These requirements are also reflected in Minister of Investment and Downstream Industry/Head of the Investment Coordinating Board Regulation Number 5 of 2025 on Guidelines and Procedures for Risk-Based Business Licensing and Investment Facilities through the Online Single Submission System (“BKPM Regulation No. 5/2025”). In practice, the Online Single Submission (OSS) system forwards the application to the Ministry of Trade’s integrated service system. The Ministry of Trade then issues, through the OSS system, either an approval or a request for revision accompanied by reasons.
IV. Mandatory Fee Provisions in Agreements and Electronic Contracts
Regulation No. 19/2026 recognizes eight e-commerce business models, including the newly added ride-hailing and online travel agent models. The new fee requirements apply to six models: marketplace, online classified advertisements, daily deals, social commerce, ride hailing and online travel agents. Accordingly, the new fee requirements do not apply to the remaining two business models, i.e. Retail Online and Price Comparison Platforms. These e-commerce operators must clearly disclose any fees charged to merchants in language that is easy to understand. Any agreed fees must be recorded in a written agreement and/or electronic contract. The new rules further require that:
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- the written agreement and/or electronic contract must be available in a downloadable form and remain accessible to the parties until it is amended or terminated;
- the operator must notify merchants of any amendment and obtain their approval through a written agreement and/or electronic contract;
- merchants may submit a written objection if the operator makes a unilateral amendment, including by imposing fees, penalties and/or other matters that were not previously agreed; and
- if the operator fails to respond within 14 working days, the merchant’s objection is deemed administratively accepted and may serve as a basis for pursuing dispute resolution.
V. The Use of Artificial Intelligence
Before Regulation No. 19/2026, AI had been addressed, among others, under Ministry of Communication and Informatics Circular Letter Number 9 of 2023 on AI Ethics, which provides a more general definition of AI. Regulation No. 31/2023 did not contain a specific definition of AI.
Regulation No. 19/2026 now defines AI as technology that can process data and information autonomously or semi-autonomously to generate predictions, recommendations, content or other decisions affecting physical or digital environments.
Business actors that use AI in e-commerce activities have the following responsibilities:
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- inform consumers, through information and/or labelling, that goods and/or services generated, displayed, recommended and/or promoted were produced using AI;
- ensure that information generated, displayed, recommended and/or promoted using AI is correct, clear, accurate and accountable;
- for e-commerce operators, establish internal procedures governing the use of AI that are proportionate to the risks associated with its use;
- for e-commerce operators, provide a mechanism for handling complaints or corrections concerning information, recommendations, promotions or services generated through AI; and
- protect consumers, business actors, personal data and intellectual property rights.
- The use of AI must also comply with applicable requirements concerning ethical values, governance, personal data protection, consumer protection, competition law and intellectual property rights. In addition, business actors must ensure that their use of AI does not harm consumers or other business actors.
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Disclaimer
This news update is prepared for general informational purposes only. The content does not constitute legal advice, a legal opinion, or counsel from IABF Law Firm. The information contained herein may not reflect the most current developments. Any quotation, distribution, or use of this information for any purpose is solely at the user’s own risk.
