Jakarta, November 7, 2025 — The Indonesian authority KPPU has called for urgent amendments to the country’s Competition Law to address emerging risks in digital markets, including algorithmic collusion and data-driven dominance.
The proposed revision of Law No. 5 of 1999 is “a strategic step to respond to new challenges in the digital economy era, especially in preventing and addressing the phenomenon of algorithmic collusion,” KPPU Chair M. Fanshurullah Asa said during a hearing with the House of Representatives’ Commission VI on November 6.
According to Asa, the current law cannot keep pace with technological change and modern business models. “New forms of market dominance, such as misuse of user data, algorithmic discrimination, and AI-based predatory pricing, can no longer be captured by the old legal instruments,” he said.
He explained that algorithmic collusion can now occur without any explicit agreement between competitors, as automated pricing systems monitor and match each other’s prices. “As a result, market prices can become uniform without any meeting, and this is difficult to prove legally,” he added.
Expanding definitions and strengthening enforcement
KPPU said that without adaptive legal reform, data and algorithm misuse could create market imbalances, suppress innovation, and lock consumers into monopolistic digital ecosystems. The authority proposed expanding the legal definitions of “relevant market” and “abuse of dominant position” to include data and algorithm-based dominance.
The agency also urged lawmakers to strengthen evidentiary rules in competition cases by recognizing indirect evidence, such as economic data and digital communications, which are often critical in nontraditional digital cases.
KPPU further emphasized the need for structural reforms to ensure the agency’s independence and administrative accountability, including clearer separation between administrative and functional bodies and the establishment of provincial offices to decentralize enforcement.
National economic significance
“Modern economic growth can no longer rely solely on capital accumulation and labor. A nation’s competitiveness is determined by its ability to innovate within a competitive and open economic system,” he said, citing ideas from Nobel laureates Joel Mokyr, Philippe Aghion, and Peter Howitt linking innovation, competition and economic growth.
KPPU said it believes the legal reform will strengthen economic fairness, empower small and medium-sized enterprises, and improve investment conditions. “This reform is not merely an institutional interest but a national necessity to prepare Indonesia for the challenges of the global digital economy,” Asa concluded.
Source: https://kppu.go.id/wp-content/uploads/2025/11/Siaran-Pers-No.-070_KPPU-PR_XI_2025.pdf
