Legal Framework and Consumer Protection in Indonesia’s Digital Economy: Challenges, Gaps, and Reform Directions

Abstract

The rapid expansion of Indonesia’s digital economy has increased consumer participation in electronic transactions while simultaneously creating legal challenges related to data protection, contractual fairness, and regulatory enforcement. This study aims to analyze the adequacy of Indonesia’s legal framework in protecting digital consumers, identify the main challenges in its implementation, and formulate directions for legal reform. The analysis focuses on Law Number 8 of 1999 concerning Consumer Protection, the Personal Data Protection Act, the Electronic Information and Transactions Law, Government Regulation Number 80 of 2019 concerning Electronic Commerce, and sectoral regulations issued by the Financial Services Authority (Otoritas Jasa Keuangan/OJK) and Bank Indonesia. This research employs a normative juridical method using a qualitative approach through the examination of statutory regulations, legal doctrines, and relevant scholarly literature. The findings indicate that Indonesia has established an important legal foundation for digital consumer protection; however, fragmented regulations, overlapping institutional authority, weak enforcement mechanisms, complex online contractual practices, and recurring personal data breaches continue to reduce regulatory effectiveness. The study concludes that harmonizing legal provisions, strengthening institutional coordination, improving enforcement capacity, expanding online dispute resolution mechanisms, and integrating technological safeguards are essential to ensure effective consumer protection and support sustainable digital economic development in Indonesia