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Electronic Information Law Amended

The House of Representatives has passed a bill amending Law No. 11 of 2008 on Electronic Information and Transactions (“EIT Law”) in order to address issues that have developed in the electronic information sector over the past year.

The main amended provisions are as follows:

• Definition of Electronic Systems Provider;
• Use of electronic information and documents as evidence in court;
• Protection of privacy;
• Protection from illegal distribution and transmission of electronic information and documents;
• Law enforcement;
• The Government’s role; and
• Amended sanctions.

♦ Electronic Systems Provider Defined

An Electronic Systems Provider is an individual or entity, whether individually or jointly, that provides, manages and/or operates electronic systems for self-use and/or the interests of other parties. Previously, only Electronic Systems Organisation was defined.

♦ Law Enforcement

Electronic information and documents are increasingly being submitted as evidence in criminal and civil proceedings. The amendment strengthens this by clearly stipulating the admissibility of electronic information and documents as long as they are relevant.

Electronic information and documents obtained through interception or wire-tapping must have been gathered in the framework of law enforcement based on a request from the police or other authorized institution, in conformity with the prevailing laws on criminal procedure. Procedures for interception will be regulated under a law. The requirement to regulate interception and wire-tapping in a law was stipulated in Constitutional Court Decision No. 5/PUU-VIII/2010.

♦ Right to be Forgotten

The amendment introduces a new concept to the EIT sector in Indonesia, the Right to be Forgotten (the “RTBF”). The RTBF was first introduced in the European Union Regulation on General Data Protection (“EU Regulation”) to ensure that individuals reserve the right to request the removal of hearsay or irrelevant information about themselves that has been previously disclosed through the internet.

The EIT Law stipulates that private data cannot be used or distributed unless previously permitted by the respective person. Now, people can use a subpoena to request that Electronic Systems Providers erase certain private information and may claim for damages incurred due to its disclosure.

However, the amendment does not specify the types of personal information that may be requested to be erased. In light of this, certain parties, especially the media, have voiced concern over the enforceability of this concept and that it may be abused by other parties. The EU Regulation excluded media journalism as a subject for the RTBF concept. Further provisions on RTBF will be regulated in a Government Regulation. We are not aware whether that regulation will be integrated with the currently deliberated Bill on Data Privacy.

♦ Government to Take Action Against Prohibited Content

To prevent circulation and usage of electronic information and documents that contain content prohibited by law, the Government is able to cut access directly or order the Electronic Systems Provider to cut access to such content.

♦ Sanctions

Any unauthorized party that intentionally distributes, transmits or provides access to electronic information or documents that contain gambling, indecency, blackmail, or threats will be subject to a maximum of 6 years’ imprisonment and maximum fine of Rp1 billion, while content containing defamation or slander is subject to a maximum of 4 years’ imprisonment and maximum fine of Rp750 million. Defamation and slander are considered complaint-based felonies.

Parties intentionally disseminating misleading information that results in losses for consumers or advocates hatred or hostility towards certain ethnic, religious, or racial groups are subject to 6 years’ imprisonment and fine of up to Rp1 billion. Any unauthorized party who transmits physical or psychological threats, material losses, or bullying is subject to 4 years’ imprisonment and maximum fine of Rp750 million.

November 3, 2016

Copyright © 2016 AKSET. All rights reserved.

by Bonar

Government Proposes Regulation for Internet-Based Applications and Content Services

Rapid growth in the telecoms sector, mainly triggered by the penetration of Internet usage, will continue and certainly accelerate in the future. The emergence of Over-The-Top (“OTT”) services, i.e., online content, applications and services, has rapidly allowed telecoms customers to access numerous services in addition to basic fixed and mobile telephony. At the same time, the legal sector is hard-pressed to keep up with the fast growing developments.

On March 31, 2016, the Ministry of Communications and Informatics (the “MoCI”) issued Circular Letter No. 3 of 2016 on Provision of OTT (the “Circular Letter”) aiming to provide clarity on the obligations of OTT service providers, as well as prohibitions attaching to the sector.

In an effort to introduce a new regulatory environment for OTT service providers, the MoCI opened a public consultation in relation to its proposed OTT regulation on April 29, 2016 (the “Draft Regulation”). Interested parties had until May 12, 2016 to submit comments. However, to date, the Draft Regulation has not been issued by the government.

The key provisions in the Draft Regulation are as follows:

♦  Regulatory Framework for OTT Services

Under the Draft Regulation, OTT services comprise internet-based applications and content services, which are defined as follows:

1. Internet Based Application Services (Layanan Aplikasi Melalui Internet) is defined as the utilization of software that allows communication services in the form of short texts, voice calls, video calls, electronic mail, chatting/instant messaging, financial and commercial transactions, data storage and retrieval, games, social media networks, and their derivatives that utilize Internet access through a telecommunications network provider; and
2. Internet Based Content Services (Layanan Konten Melalui Internet) is provision of digital information, which may be in the form of writings, voices, images, animation, music, video, film, games, or a combination or parts of all of the above, including in forms that are streamed or downloaded by utilizing telecommunications services through a telecommunications network provider.

OTT service providers may be Indonesian or foreign, either individuals or business entities. Despite this, Indonesian service providers are able to establish a corporation or non-corporate entity, whereas foreign service providers must be registered as a Permanent Establishment (Bentuk Usaha Tetap – the “BUT”) in accordance with the prevailing tax laws and regulations.

Whether individuals or business entities, OTT services providers must register a business form and its activities with the Indonesian Telecommunications Regulatory Body (Badan Regulasi Telekomunikasi Indonesia – “BRTI”) not later than 30 working days before the launch of their OTT services in Indonesia. Registration requirements include a Deed of Establishment and its amendments Minister of Law and Human Rights approvals and notification receipts for business entities, Principal License or Permanent Business License issued by the Investment Coordinating Board (Badan Koordinasi Penanaman Modal – “BKPM”) for foreign entities, copy of appointment as a BUT for foreign entities, Taxpayer Registration Number (Nomor Pokok Wajib Pajak – “NPWP”), Certificate of Domicile (Surat Keterangan Domisili – “SKDP”), type of OTT service, and center for contact in Indonesia.

♦  OTT Service Provider Obligations

The Draft Regulation sets forth several obligations that must be followed by OTT service providers. This includes provisions on monopoly and unfair business competition practices, trade, consumer protection, intellectual property rights, broadcasting, films, pornography, anti-terrorism, taxes, transportation and logistics, tourism and hospitality, finance, and health, among others. OTT service providers must carry out data protection and data privacy, content filtering and censor mechanism, utilize/integrate national payment gateway system by Indonesian legal entities for paid OTT services, use Indonesian internet protocol numbers, grant access for lawful interception by authorized government institutions, and include information and guidelines to use the service in Indonesian language.

♦  Content Restriction

In addition to the above obligations, OTT service providers are restricted from providing services or content that: conflict with the Indonesian Constitution and prevailing laws and regulations; threaten the unity of the Republic of Indonesia; may raise conflicts between groups, ethnicities, races, religions and sects; degrade, harass, or tarnish religious values; encourage the public to engage in unlawful acts, violence, narcotics, psychotropic and other addictive substances; degrade human dignity; violate decency; or constitute pornography, gambling, humiliation, extortion or threats, defamation, hate speech, or copyright infringement. If the contents are not directly provided by the relevant OTT service provider, the said provider must inform or socialize such matters relating to the restriction of such content to partners or direct providers of such content.

♦  Center for Contact Information

OTT service providers are obliged to provide center for contact information, which at least include a phone number, email address for complaints, and/or user’s service site. The center must have a facility to service questions and complaints from users.

♦  Data Storage

OTT service providers must record all transactions and service traffic for at least 3 months. For legal proceedings, OTT service providers must maintain all data that are directly involved with a given court proceeding based on the request of law enforcement until such proceedings reach a legally binding decision.

August, 2016

Copyright © 2016 AKSET. All rights reserved.

by Bonar