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Advances in Social Sciences Research Journal – Vol. 10, No. 3
Publication Date: March 25, 2023
DOI:10.14738/assrj.103.14234.
Sinaga, W. (2023). The Role of Law in Indonesia's Economic Development in the Digital Era. Advances in Social Sciences Research
Journal, 10(3). 237-246.
Services for Science and Education – United Kingdom
The Role of Law in Indonesia's Economic Development in
the Digital Era
Wetmen Sinaga
Universitas Kristen Indonesia, St. Mayjen Sutoyo
No.2 Cawang, Jakarta, Indonesia
Abstract
The current digital economy raises demands from business people to carry out
activities online. Law No. 5 of 1999 about the Prohibition of Monopolistic Practices
and Unfair Business Competition, is still unable to accommodate the impact of the
digital economy that will emerge in the future. The development of the digital
economy will lead to an increase in the ability of digital platforms to collect more
data, increase the competitiveness of online store owners and with the emergence
of several applications, so that the dominant position of digital platforms can be
misused which can result in competitors being uncompetitive at the market level.
Related to this, it is necessary to have regulations that regulate in a more detailed
scope related to the existence of juridical protection of personal data of people
which in the future will be required in data collection on the ongoing practice of
changing digital economy.
Keywords: digital economy, laws and regulations related to personal data protection,
laws and regulations in the digital economy era
INTRODUCTION
Every Indonesian citizen must be able to interpret the meaning and the role of the 1945
Constitution of Republic of Indonesia (UUD 1945) as the highest origin of law in Indonesia,
which contains the rights and interests of every layer of society. Article 28-point C of the 1945
Constitution became a philosophy in Indonesia regarding digital development through
technology. The concept of the digital economy was first introduced by Don Tapscott as a socio- political and economic system that has the characteristics of an intelligence space, including
information, various access instruments, capacities, and information processing. The
components of the digital economy were identified for the first time, namely the technology,
information and communication industries, e-commerce activities, and the digital distribution
of goods and services.12 Based on this definition, the digital economy is an economy based on
electronic goods and services produced by electronic businesses and traded through electronic
commerce, which means, businesses with electronic production and management processes
and which interact with partners and customers and conduct transactions via the internet and
the web. technology. The Indonesian government is currently planning for Indonesia to have
1 Tapscott Don (1995) The Digital Economy: Promise and Peril in the Age of Networked Intelligence. New York:
McGraw-Hill page 2.
2 Atkinson, R.D. and McKay, A.S (2007), Digital Prosperity: understanding the economic benefits of the information
technology revolution, Information Technology and Innovation Foundation, Washington, DC, page 7.
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Advances in Social Sciences Research Journal (ASSRJ) Vol. 10, Issue 3, March-2023
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the largest digital economic power in Southeast Asia starting from 2020. The government
targets e-commerce transactions to create 1,000 technopreneurs with a business value of US$
10 billion by 2020.3 In the context of the digital economy, businessmen which use such as trade
mechanisms with e-commerce and transactions using e-banking which store consumer
personal data such as names, home or office addresses, email addresses and even data on
consumer bank account numbers. The definition of personal data is a true and real information
attached to a person, thereby identifying that person. The importance of personal data
protection is to ensure that someone's personal data that is collected is used in accordance with
the purpose of collection, so that data misuse does not occur. Personal Data is a concept that
describes a process or effort to combine regulations regarding privacy and personal data that
are scattered in various legal instruments into one separate legal instrument. Thus, the
protection of privacy and personal data has a sui generis place.
The right to protection of personal data develops from the right to respect private life.
Individuals related to this matter have the position as the main owner of personal data
protection rights.4 Regarding the matter of privacy, it is not explicitly stated in the 1945
Constitution, but implicitly the right to privacy is contained in Article 28G paragraph (1) of the
1945 Constitution. Regarding the guarantee of the right to privacy itself is contained in Law No.
39 of 1999 about Human Rights Article 29 paragraph (1) and Article 30.
In Indonesia, the process of discussing privacy and personal data protection is still going
through because Indonesia already has a Personal Data Protection Bill. The bill aims to
incorporate privacy arrangements for distributed personal data into a separate law. The
drafting of the academic text on the Data Protection Bill is the initial stage of the convergence
process which was completed in October 2015. The existence of a form of juridical regulation
is the best way to protect a legal subject from the arbitrariness that is applied.
According to Westin there are 5 conceptions of privacy as follows:
Personal Autonomy
Personal autonomy is a fundamental concept, and has a rationale for individualism. To protect
personal autonomy and individuality, one must have a personal space free from outside
influences. The privacy policy is useful for protecting the borderline regarding individual data
from the prying eyes of others. The concept of privacy places limits on what countries and other
parties can get or know and what they can't know from individuals by creating a "private area."
Emotional Release
The conditional perception of privacy lies in the existence of personal freedom that makes it
possible to experience emotional release.
Limited and Protected Communications
Rosen defines privacy as a claim to social boundaries that protect a person from simplification,
objectification, and judgments taken out of context. Personal information that crosses social
boundaries from the private domain to the public domain without the knowledge of the person
3 https://balitbangsdm.kominfo.go.id/?mod= published on 15th Desember 2022, at 18:10 Western Indonesian Time.
4
Supra, European Union Agency for Fundamental Rights and Council of Europe, no 5, page 37.
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Sinaga, W. (2023). The Role of Law in Indonesia's Economic Development in the Digital Era. Advances in Social Sciences Research Journal, 10(3).
237-246.
URL: http://dx.doi.org/10.14738/assrj.103.14234
concerned, can easily be moved out of context leading to an inaccurate assessment of his or her
character.
Privacy Rights
The right to privacy offers the individual seclusion necessary for self-evaluation and self- introspection. The right to privacy is the time it takes to form, compile and evaluate opinions.
Minimizing Loads and Burdens
The final conception of the right to privacy is this right as a means of minimizing burdens. The
right to privacy gives a person a way to protect themselves from these unwanted and
aggravating intrusions. When legitimate disturbances do occur, the burden they place on
individuals must be kept to a minimum.5
RESULTS AND DISCUSSION
The business competition authority is regulated by the Business Competition Supervisory
Commission (KPPU) to carry out regulatory analysis based on the principles of fair business
competition as stipulated in Law No. 5 of 1999 about the Prohibition of Monopolistic Practices
and Unfair Business Competition.
Policies related to the digital economy sector in Indonesia include:
1. Law No. 8 of 1999 about Consumer Protection: Regarding digital economic
transactions, these laws and regulations protect in terms of legal aspects related to
consumer protection including actions that are prohibited for business actors and the
responsibilities of business actors. Aspects of prohibited actions are contained in
Articles 8 to 18. Meanwhile, aspects of responsibility are regulated in Articles 19 to 28.
In Article 18, businessmen are prohibited from making or including standard clauses in
every document and/or agreement, one of the two is when it states the transfer of
responsibilities of business actors and states that consumers are subject to regulations
in the form of new rules. In practice, standard clauses contained in platforms/sites
related to documents or agreements can be declared null and void under the Consumer
Protection Act.
2. Law No. 36 of 1999 about Telecommunications: In the regulation, there are several
clauses that support fair business competition in the telecommunications sector, among
others, Article 10, explaining that, in the operation of telecommunications it is
prohibited to carry out activities that could lead to monopolistic practices and unfair
business competition among telecommunications operators. Article 25 explains that
every telecommunications network operator is required to provide interconnection if
requested by other telecommunications network operators. The implementation of the
rights and obligations listed in paragraphs (1) and (2) is carried out based on the
principles of efficient use of resources, harmony of telecommunication systems and
equipment, improvement of service quality, and the existence of fair competition that is
not detrimental to each other. In Law No. 36 of 1999 it is explained that there is a
prohibition for telecommunications operators to carry out activities that will later result
5
Bart Willem Schermer (2007) Software Agents, Surveillance, And The Right To Privacy: A Legislative Framework For Agentenabled Surveillance,
(Leiden: Leiden University Press), page 73.