Jakarta, December 11, 2025 — Indonesia’s competition authority has called for sweeping reforms to address market power driven by algorithms, data accumulation, and network effects, warning that traditional enforcement tools are no longer sufficient in the digital economy.
Opening the Third Jakarta International Competition Forum (3JICF) in Jakarta, KPPU chairman M. Fanshurullah Asa said digital transformation has fundamentally altered market structures, creating “invisible walls” that make it increasingly difficult for new entrants — particularly micro, small, and medium-sized enterprises — to compete.
“Network effects, massive data accumulation, and algorithm-based decision-making have created entry barriers that are extremely hard to penetrate,” Asa said, adding that measuring market power solely through price and output is no longer adequate.
Legal Reform
Asa said Indonesia’s competition framework must shift from a reactive, case-by-case approach to a proactive, risk-based standard. He highlighted emerging forms of dominance such as self-preferencing by digital platforms and algorithmic tacit collusion, arguing that existing laws are often one step behind technological change.
According to the KPPU chairman, future policy must be able to detect monopoly risks before markets become distorted, rather than intervening only after harm has occurred.
International Alignment
KPPU also stressed the need for closer alignment with global regulatory standards, noting that digital markets are inherently borderless. Cross-border mergers, acquisitions of data assets, and competition for digital talent require regulators to “speak the same language,” Asa said.
With Indonesia pursuing OECD accession and holding new membership in BRICS, KPPU sees alignment on issues such as merger notification thresholds and system interoperability as critical to avoiding costly regulatory experimentation. The forum featured international speakers, including representatives from Russia’s competition authority, alongside Indonesian academics.
Enforcement Evolution
Beyond legal reform and international coordination, KPPU emphasized the need to modernize enforcement tools. Asa pointed to the use of digital forensics and artificial intelligence to detect bid rigging in public procurement, as well as stronger safeguards for small businesses facing imbalanced contracts within platform ecosystems.
“Policy without enforcement is just rhetoric,” Asa said, adding that data-driven enforcement must become central as KPPU marks its 25th anniversary.
KPPU said the ultimate goal of the reforms discussed at 3JICF is to create more contestable markets that encourage innovation and strengthen economic resilience. Without open markets and reduced bottlenecks, Asa warned, Indonesia’s ambition to reach 8 percent economic growth would remain out of reach.
The forum is expected to produce actionable policy recommendations for government, regulators and market participants, aimed at ensuring Indonesia’s economy remains fair, transparent and open to new investment.
Source: https://kppu.go.id/wp-content/uploads/2025/12/Siaran-Pers-No.074_KPPU-PR_XII_2025.pdf
