Mandatory Registration for Startups in Indonesia and Right to be Forgotten Implementation

Following the amendment to Law No. 11 of 2008 on Electronic Information and Transactions through Law No. 19 of 2016, the Indonesian government has started work on amending the current Government Regulation No. 82 of 2012 on the Implementation of Electronic Transactions and Systems.

A couple of topics addressed in the Draft Amendment include mandatory registration for electronic system providers[1] and elaboration on the right to be forgotten that was introduced in the EIT Law Amendment.

Mandatory Registration

The mandatory registration for electronic system providers in the Draft Amendment is adopted from Minister of Communication and Information Technology Regulation No. 36 of 2014 on Electronic System Provider Registration Procedure with a notable extension of the mandatory registration to specifically include startups.

Other than electronic system providers which have a specific sectoral supervisory and regulatory agency and those that are considered as part of the government, an electronic system provider will be required to register if they:

  1. Provide an online portal, site, or application through the internet that is used to facilitate offers and trading of goods or services;
  2. Facilitate online payment or financial transaction conducted through data communication network or the internet;
  3. Process electronic information containing or requiring fund deposit;
  4. Process or stores data, including personal data, for operational activities that serves the general public and related to electronic transaction activities;
  5. Operate an electronic system that is used to transfer paid digital material;
  6. Operate an electronic system that provides, manage, and/or operate communication services in the form of short messages, voice calls, video calls, electronic mails, and online conversations, search engine, networking and social media, as well as services providing digital information in the form of text, sound, picture, animation, music, video, film, game or a combination of some and/or all, including in the form of streaming or download.

Essentially, the Indonesian government is seeking to impose mandatory registration for startups in addition to the recently enforced obligation of establishing a permanent establishment in Indonesia.[2] It is most likely that the Registration Regulation will also be revised following the enactment of the Draft Amendment.

Right to be Forgotten

In the unexpected addition of right to be forgotten in the IET Law Amendment,[3] the government intends to take another step further by introducing elaborative provisions in the Draft Amendment.

In the EIT Law Amendment, “every electronic system provider must dispose of electronic information and/or electronic documents that are not relevant which are under their control upon the request from the relevant person based on a court order”.[4] Not relevant is explained in the Draft Amendment as personal data:

  1. That is obtained and processed without the consent of the personal data subject;
  2. Whose consent has been withdrawn by the personal data subject;
  3. That is illegally obtained and processed;
  4. That is no longer appropriate for what it was intended;
  5. Whose use has exceeded the time limit that was agreed or based on prevailing laws and regulations; or
  6. That is displayed by electronic system provider which caused damages personal data subject.

The Draft Amendment also addresses the obligation for electronic system providers to establish a mechanism to be implemented upon receiving a right to be forgotten request, stating that such mechanism must at least include:

  1. How to process right to be forgotten court order document;
  2. Tracing the location of the electronic information or document that is requested to be deleted; and
  3. Irrelevant electronic information or document that is to be deleted.

The next step in terms of the right to be forgotten will be for the Supreme Court to also issue a regulation to establish a uniform for Indonesian courts to process right to be forgotten application requests. However, this is most likely going to wait until the Draft Amendment is introduced, which is expected to be sometime this year.


FOOTNOTES

[1] According to Article 1 number 6a of the EIT Law, electronic system provider is “any person, state administrator, business entity, and public entity that provides, manages, and/or operates an electronic system, either individually or collectively to the users of the electronic system for their own interests and/or for the interests of others”

[2] See: Assegaf Hamzah & Partners, “New Rules on OTT Services in the Offing”, 27 May 2016

[3] See: Andin Aditya Rahman, “Indonesia enacts Personal Data Regulation,” Privacy Laws & Business International Report, Issue No. 145, February 2017

[4] EIT Law, Article 26 paragraph (3)


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ABBREVIATIONS

  1. Draft Amendment: Draft Government Regulation on the Amendment to Government Regulation No. 82 of 2012 on Electronic Transactions and Systems Application
  2. EIT Law: Law No. 11 of 2008 on Electronic Information and Transactions, as amended by Law No. 19 of 2016 on the Amendment to Law No. 11 of 2008 on Electronic Information and Transactions
  3. EIT Law Amendment: Law No. 19 of 2016 on the Amendment to Law No. 11 of 2008 on Electronic Information and Transactions
  4. Registration Regulation: Minister of Communication and Information Technology Regulation No. 36 of 2014 on Electronic System Provider Registration Procedure

PHOTO CREDIT

Feature image by Oleg Magni


 

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