Government To Push Regulation That Forces Indonesian E-Commerce Companies To Use Local Domains

Andi Miftachul - 23 March 2013

In order to protect Indonesian market from fraud by unregulated e-commerce sites, Indonesia’s Ministry of Communications and Informatics will force e-commerce companies to register to the ministry. One of the non-optional condition to do so, is to force e-commerce sites to use a .id domain name.

This regulation is a part of a proposal by the ministry on regulations for electronic companies’ registration. According to the plan, this regulation will be finished and publicized next April.

Director for e-Business inside the Ministry, Azhar Hasyim as quoted from Detik Finance said that the obligation to use .id domain names is to help the government control, track, block and also to apply law enforcement for troubled e-commerce sites. This action cannot be done to e-commerce companies using foreign TLD (top level domains) such as .com because according to Azhar, government doesn’t have the data of e-commerce owners with foreign TLDs.

Hasyim claims that the Ministry has accepted big number of reports, including from foreign consumer, about fraud done by Indonesian e-commerce sites. Aside of bringing assurance to consumers, this regulation also tries to benefit e-commerce companies itself. E-commerce with .id domain names will be registered and obtain a “license” from the government as a safe e-commerce site.

Yusuf Ijsseldijk, CEO of GoIndonesia as quoted from Metro News expresses his concern towards this regulation as it will hold back the growth of the e-commerce industry in Indonesia. Being given a hard time to obtain the .id domain for e-commerce is one thing, but the .id domain usage will also prevent Indonesian e-commerce sites to compete in the global level.


The good news, still according to Metro News, this regulation only applies towards new e-commerce companies. The currently establish companies won’t have to switch to .id domain name. Although every e-commerce companies and the other electronic-based companies in Indonesia will still have to register to the government according to the latest Government Regulation for System and Electronic Transaction Provider act.

Besides regulating e-commerce, this new regulation proposal will also control the obligation for internet companies to put their data centers in Indonesia.

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