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Consumer Protection Law: The Case Study Of Grabtoko

Company In Indonesian E-Commerce Transactions

Felix Pratama Tjipto

International Business Law Program, Universitas Prasetiya Mulya, Indonesia
[email protected]

Jason Pratama Ong

International Business Law Program, Universitas Prasetiya Mulya, Indonesia
[email protected]

Marshal Ramadhan Sulistio

International Business Law Program, Universitas Prasetiya Mulya, Indonesia
[email protected]

Tri Harnowo
International Business Law Program, Universitas Prasetiya Mulya, Indonesia
[email protected]

Submitted: September 25, 2021 Revised: October 26, 2021 Accepted: October 27, 2021

ABSTRACT

Technology innovation is steadily increasing its capacity in helping human activities, one of
which is through digital transactions. The increased use of technology, however, could
potentially create legal loopholes which may violate consumer’s rights in online
transactions like the recently happened GrabToko case. The method used in this article is a
normative analysis thorough literature review with statutory and comparative approach
related to Indonesian customer protection law, with the reference of previous articles,
seeing the increasing usage of digital transactions. This article aims to provide an
explanation regarding the advantages and the disadvantages of existing regulations and what
needs to be improved related to frauds in the case of GrabToko. Furthermore, it will also
be discussed about the legal responsibility of the consumer dispute settlement
organizations. The results of this article shows that there are still needs of improvements
since the system has its own advantages and disadvantages, especially regarding fraud and
administration systems that need to be updated in corresponding law and the development
in the aspect consumer protection law.

Keywords: Consumer Protection Law; Consumer Dispute Settlement;

Consumer Rights

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INTRODUCTION
How transactions occur around the world is gradually changing because of
globalization and free trade. Online transactions are seemingly better than its offline
counterpart, especially during the COVID-19 pandemic. It is easier, cheaper, and much
more convenient for both business actors and consumers in general. However, disruptive
technology, such as e-commerce transactions, creates a new market which is not regulated
most of the time when it started. The absence of rule opens legal loopholes that may be
abused by ill-intended parties. Consumer protection law exists to prevent abuse against
consumers. Through the regulation, consumers are granted rights that are guaranteed and
protected by the government. Consumers will certainly become the most disadvantaged
parties without proper regulation. Another matter that might further suggest the urgency
of this issue is that e-commerce transactions make it easier to do cross-border transactions
as it is not bound by physical limitations. Transaction may easily take place in both foreign
transactions and domestic transactions. According to the United Nation Conference on
Trade and Development, it is estimated that the global e-commerce sales will reach $26.7
trillion as of 2021.1
Figure 1: Retail E-Commerce Sales Worldwide from 2014 to 20242

1
“Global e-commerce jumps to $26.7 trillion, COVID-19 boosts online sales,” UNCTAD, 3 May 2021,
https://unctad.org/news/global-e-commerce-jumps-267-trillion-covid-19-boosts-online-sales.
2
Tugba Sabanoglu, “Retail e-commerce sales worldwide from 2014 to 2024,” Statista, 26 March 2021,
https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/.

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In 2019, it has been stated that the sale of e-commerce will transcend over $3.5
trillion globally. It is also being recorded that in the same year, an average of 1.92 billion
people worldwide bought their needs by digital means.3

Figure 2: Retail E-Commerce Sales Growth Worldwide, by Region 20204

COVID-19 pandemic has caused the people to rely on the usage of technology and
e-commerce transactions. E-commerce has become the most used method for transactions
because people are being quarantined at their homes and unable to do physical contact to
minimize the spread of COVID-19 infection. As of June 2020, e-commerce traffic broke a
new record of $22 billion monthly stopping by. Amazon, one of the biggest e-commerce in

3
Daniela Coppola, “E-commerce worldwide - Statistics & Facts,” Statista, 15 April 2021,
https://www.statista.com/topics/871/online-shopping/.
4 Alexandra Samet, “Global ecommerce market report: ecommerce sales trends and growth statistics for
2021,” Business Insider, 30 December 2020, https://www.businessinsider.com/global-ecommerce-
2020-report?r=US&IR=T.

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the world, has five billion unique visitors registered for its e-retail, computing services,
consumer electronics and e-commerce content in June 2020, resulting in the increase of
sales totalling to $96 billion.5 6
Meanwhile in Indonesia, the sales of Indonesian e-commerce powerhouse grew
significantly compared to the year before. As of August 2020, Bukalapak had a 50%
increase in sales compared to the same month of the year before and Tokopedia increased
by Rp1.4 million in sales compared to January 2020.7
The Indonesian government tried to adapt by enacting necessary regulations to
strengthen consumer protection. Unfortunately, drafting a perfect regulation is difficult to
do. Although the regulations have been made, it seems that the regulations are not
adequate enough. There are open gaps within the legal framework that places consumers in
a vulnerable position against harmful practices. Diani Sadiawati from the Ministry of
National Development Planning of the Republic of Indonesia stated that Indonesia
regulations generally have several problems: firstly, there are provisions within a regulation
that clearly contradict other regulations; secondly, regulations are inconsistent with other
statutory regulation and its implementing regulations; thirdly, certain regulations are
ambiguous and cause obscurity.8
In 1999, the Indonesian government formed an organization for consumers to settle
any dispute they have when performing transactions. Back then, the regulation, that serves as
the basis of their authority, was made when e-commerce transactions were not apparent yet in
Indonesia. 22 years since it was formed, technology has advanced rapidly and e-commerce
transactions have become common in Indonesia. It is important to find out if e-

5 Tugba Sabanoglu, “Net revenue of Amazon from 1st quarter 2007 to 1st quarter 2021,” Statista, 30 April
2021, https://www.statista.com/statistics/273963/quarterly-revenue-of-
amazoncom/#statisticContainer.
6 Coppola, “E-commerce worldwide.”
7 Yuni Astutik & Rahajeng Kusumo Hastuti, “Transaksi Digital Sampai e-Commerce Melesat di Era
Pandemi,” CNBC Indonesia, 25 August 2020,
https://www.cnbcindonesia.com/tech/20200825151913-37-181854/transaksi-digital-sampai-e-
commerce-melesat-di-era-pandemi.
8 Ibnu Sina Chandranegara, “Bentuk-Bentuk Perampingan dan Harmonisasi Regulasi,” Jurnal Hukum Ius
Quia Iustum 26 no. 3 (2019): p. 440, https://journal.uii.ac.id/IUSTUM/article/view/13070.

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commerce transactions are within the jurisdiction of the organization and the system that it
employs is effective and efficient for e-commerce dispute settlement.
As a result of these conditions, consumer protection law is a field of law that must
be improved in order to ensure its development in the right direction. The paper aims to
answer the following questions:
1. Are current Indonesia laws and regulations related to consumer protection still
adequate for today’s technological developments of e-commerce?
2. How the implementation of Online Dispute Resolution improves e-commerce
dispute settlement in Indonesia?
3. What needs to be done in order to provide secure e-commerce transactions?

METHOD
This research aims to provide explanations to readers by using normative juridical
research methods. Normative juridical approach is a method where it analyzes the current
laws and regulations and provides solutions for problems that might arise or have arisen
from the current laws.9 The sources are based on primary, secondary, and tertiary sources.
The primary sources are statutory regulations, such as Law No. 8/1999 on Consumer
Protection (UUPK), Law No. 11/2008 on Information and Electronic Transaction (UU
ITE), and Government Regulation No. 80/2019 on Trade Through Electronic System (PP
PMSE) which will be analyzed about its effectiveness in providing consumer protection.
Secondary legal sources include articles, journals, and literature on consumer protection in
the digital era. Tertiary data used is internet media which helps the writer to understand
and provide an explanation of primary and secondary legal materials. The paper also uses
the GrabToko case that involves fraud in digital transactions as a case study.

9 Sanne Taekama, "Theoretical and Normative Frameworks for Legal Research: Putting Theory into
Practice," Law and Method (2018),
https://www.researchgate.net/publication/323671739_Theoretical_and_ Normative_
Frameworks_for_Legal_Research_Putting_Theory_into_Practice.

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RESULTS AND DISCUSSIONS

The Urgency of Adequate Consumer Protection Regulation
It is the right of the consumer to feel comfortable, secure, and safe when
purchasing goods/services in a transaction. The right to choose goods/services and to
obtain goods/services in accordance with the value and conditions as well as guarantee. The
right to true, clear and honest information regarding the conditions and guarantee of
goods/services. They also have the rights to be heard when expressing complaints and
receive proper advocacy, protection, and settlement in a dispute. Furthermore, consumers
have the right to receive consumer assistance and education, to receive proper, honest, and
non-discriminatory treatment, to obtain compensation, redress, and substitution, if the
goods/services received are not as requested by consumers.10 UUPK has stated all of these
rights along with many others, however, in our observation in some cases consumers are
still suffering losses without receiving compensation which means that the law is not
enforced properly as seen in the GrabToko case as illustrated below. A law loses its
purpose if it is not enforced properly, which is an issue that needs to be addressed urgently,
seeing the rapid growth of e-commerce nowadays.
A consumer faces limited selections of goods that an offline market can supply at a
time. This is not the case with e-commerce marketplace. It greatly expands the selection of
goods that consumers can choose from. Establishment of websites, online shops, and other
information technology infrastructures, like artificial intelligence and search engines
optimization help consumers find what they want without much effort. Giving consumers a
vast selection where they can find the best value for the best quality that they desire. As a
result, transactions are not only performed by two parties in the same jurisdiction but it
11
could also involve parties coming from abroad. Disputes coming from international
transactions might be a complex matter. That is why consumer protection is a matter that
should be considered.

10 Article 4 of Law No. 8/1999 on Consumer Protection

11 Sinta Dewi Rosadi & Zahra Tahira, “CONSUMER PROTECTION IN DIGITAL ECONOMY ERA : LAW
IN INDONESIA,” Yustisia Jurnal Hukum 7 no. 1 (2018),
https://jurnal.uns.ac.id/yustisia/article/view/20144.

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The Importance of the Consumer Trust

Trust is a key component in an e-commerce transaction because it allows the
process to run smoothly despite the security risks present in an e-commerce environment.
Many e-commerce business actors are creating strategies to increase their consumer’s trust
to increase their sales. Cheskin Research & Studio Archetype/Sapient eCommerce
TrustStudy mentions that trust is something that develops as consumers are provided with a
sense of security. Nielsen states that trust is an actual accumulation of results of a business
actor and its company’s behaviour in interacting with their consumers in time as trust is
something that is hard to achieve and can easily be lost. Egger and de Groot state that
offline experiences and reputation of the store; the visual attraction, such as the website
layout design, website information, and contents; video products; and security aspects like
terms and conditions, privacy policies; also communication method, like customer service
and post-purchase service are factors in building consumers’ trust. Pitchler states
consumers cannot do certain things in online transactions that they can usually do in offline
transactions, such as to see, feel, and review the desired products physically. The absence
of physical stores and interaction with staff are also certain things that consumers cannot do
in an online transaction. Trust plays a major role in creating a convenient and safe
transaction process for the consumers. Therefore, information like advertisements,
promotional videos, and testimonies; great customer service; and nice and intriguing
platforms are essential aspects in building consumer’s trust.12
Consumer Protection Case Study: GrabToko Case Summary
At the end of 2020, Indonesia was introduced to the infamous e-commerce
dispute, the GrabToko case. GrabToko is a newly established e-commerce corporation that
sells electronic hardwares, like smartphones and tablets. GrabToko was first founded in
early 2020 but began its first operation at the end of 2020. The person responsible for the
GrabToko case is Yudha Manggala Putra who acts as the managing director of GrabToko.

12 Mary Anne Patton & Audun Jøsang, “Technologies for Trust in Electronic Commerce,” Electronic Commerce
Research 4 (2004): p. 1-3,
https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.60.3255&rep=rep1&type=pdf.

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Yudha rented an office located in Kuningan, South Jakarta where he hired six employees
who work as customer service at GrabToko. He informed one of GrabToko consumers that
the delivery of purchased goods was delayed from 4th January to 5th January 2021 due to
embezzlement of funds by GrabToko investors.13 This is a modus operandi that is often used.
Less than one year, GrabToko has gained over Rp17 million from a total of 980 consumers
as reported by the Criminal Investigation Agency of the Indonesian National Police
(Bareskrim Polri). According to Brigadier General Slamet Uliandi, Director of Cyber
Crime of Bareskrim Polri, GrabToko offers electronic hardwares at low prices but never
sends these hardwares to consumers once payment is received. Yudha from the beginning
built a Grab Toko for fraud by using hosting from abroad so it will not be easily traced in
Indonesia. It is informed by the consumers that the Instagram Account later cannot be
accessed and the customer service do not reply anymore to consumers complaints.14
The creator of GrabToko, Yuda Manggala Putra, uses his friend's name which is Anak
Agung Narendra Putra, as the commissioner of GrabToko without consent of Agung himself.
As stated by Agung that he has no connection with the corporation except that he knows Yuda
Manggala Putra personally as a friend.15 A testimony from Desty Nur Cahyani stated that she
was attracted to GrabToko because of the incessant advertising promoting up to 90% discount
that appeared on national television broadcasts as well as on large highway billboards. Because
of that, she was convinced that GrabToko was a legitimate business.16 Another victim of the
case, Fences, stated that all other victims have been gathered and a

13 “Kronologi Isu Penipuan Grab Toko Hingga Rekening Diblokir BCA,” CNN Indonesia, 7 January 2021,
https://www.cnnindonesia.com/ekonomi/20210107081022-92-590508/kronologi-isu-penipuan-grab-
toko-hingga-rekening-diblokir-bca.
14 “Kronologi Grab Toko Tipu 980 Orang dan Rugikan Rp17 M,” CNN Indonesia, 15 January 2021,
https://www.cnnindonesia.com/ekonomi/20210115135836-92-594181/kronologi-grab-toko-tipu-
980-orang-dan-rugikan-rp17-m.
15 “Grab Akan Lakukan Langkah Hukum Terhadap Grab Toko,” Kompas, 7 January 2021,
https://tekno.kompas.com/read/2021/01/07/14273287/grab-akan-lakukan-langkah-hukum-
terhadap-grab-toko.
16 Emir Yanwardhana, “Kerugian Konsumen yang Kena Tipu Grab Toko Rp 1,1 Miliar,” CNBC Indonesia,
11 January 2021, https://www.cnbcindonesia.com/news/20210111171944-4-215116/kerugian-
konsumen-yang-kena-tipu-grab-toko-rp-11-miliar.

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representative has reported GrabToko as the responsible party to Greater Jakarta

Metropolitan Region of the Indonesian National Police.17
A written interview with one of GrabToko consumers, reveals that the victims
have asked for further information from Bareskrim Polri and requested the police to bring
this case to court for monetary refund but the procedure is complicated. The victim has
also asked consumer dispute settlement organizations for help but to no avail. The victim
felt hopeless and decided not to pursue the case any further because there was no certainty
that she would get anything out of this case. This generated distrust in the legal system that
is supposed to protect them.18
Consumer Protection Case Study: GrabToko Case Analysis - The Fraud Theory
Fraud is a crime of getting money by deceiving people.19 Fraud is characterized by
premeditated ill intention where the seller persuades a consumer into a purchase agreement
but the seller does not intend to fulfill their part of the agreement in the first place. 20 Fraud
can come in other schemes. Transaction fraud is becoming more and more common due to
the development of e-commerce because it is somewhat easier to do when you do not meet
face to face.21 Consumers can only rely on photos and videos of goods to see it and that
does not ensure that the goods will be sent once payment is completed.
The GrabToko case is a fraud case because it involves a purchase agreement between
the seller and the buyer that were not fulfilled by the seller. It is also an internet fraud case
because it involves the use of the internet in executing the fraud scheme. It is safe to say that it
is an internet-facilitated fraud case based on the understanding of fraud theory. Further analysis
suggests certain actions done by GrabToko indicate signs of deception. The

17 Trio Hamdani, “Grabtoko Dilaporkan ke Polisi,” detikfinance, 7 January 2021,

https://finance.detik.com/berita-ekonomi-bisnis/d-5324810/grabtoko-dilaporkan-ke-polisi. Also see
https://twitter.com/halobuaya/status/1345289047078363137
18 Wednesday, 27 January 2021
19 “Meaning of fraud in English,” Cambridge Dictionary,
https://dictionary.cambridge.org/dictionary/english/fraud.
20 Miriam Albert, “E-Buyer Beware: Why Online Auction Fraud Should Be Regulated,” American Business Law
Journal 39, no. 4 (2002): p. 579 & 581,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1676905.
21 ibid. p. 578

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composition of its brand, GrabToko, has confused some consumers to assume it is part of
Grab, a ride-hailing corporation. Another deceptive matter is GrabToko’s advertisement
with discounts up to 90%. GrabToko may have intentionally done this to lure unaware
consumers before running off with their money. All of these things would fall under the
fraud theory, which is to create deception to steal the consumers’ money.
Current E-commerce Consumer Protection Regulations in Indonesia
The main purpose of UUPK is to protect consumers from harmful business practices
that could potentially hurt them financially. Consumer protection under the UUPK is defined
as “all efforts to ensure legal certainty to provide protection to consumers”.22 To be more
precise, UUPK was made to increase consumer awareness, ability, and independence to
protect themselves; elevating the dignity of consumers by preventing them from the negative
excesses of the use of goods/services; increasing the empowerment of consumers in choosing,
determining, and demanding their rights as consumers; create a consumer protection system
that contains elements of legal certainty and information disclosure as well as access to
information; raise awareness of business actors regarding the importance of consumer
protection so as to grow an honest and responsible attitude in doing business; improve the
quality of goods/services that ensure the continuity of the business of producing
goods/services, health, comfort, security, and safety of consumers.23
Consumers have the right to convenience, security, and safety when purchasing
goods/services; the right to choose and receive goods/services as agreed; the right to factual
information; the right be heard when complaining and in receiving proper advocacy, protection
and proper settlement, right to receive consumer assistance and education, to receive proper,
honest, and non-discriminatory treatment, the right to compensation, redress, and
substitution, if the goods/services received are not as requested by consumers.24 On the other
hand, business actors are responsible to realize those rights due to the general nature of
business actors having the upper hand that they can utilize unless they are given a

22 Article 1(1) of Law No. 8/1999 on Consumer Protection

23 ibid. Article 3
24 ibid. Article 4

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regulatory barrier, meanwhile consumers do not have the same position.25 Consumers are
in a vulnerable position most of the time when dealing with business actors hence the
emphasis should be on consumer protection. Business actors cannot offer or advertise
goods/services as if they have it available when they do not actually have it.26 This is further
emphasized that business actors cannot give false information regarding the condition of
goods/services.27 Business actors are prohibited from putting up advertisements that
deceive consumers regarding the quality, quantity, materials, uses and prices of
goods/services as well as the timeliness of receiving goods/services.28
If consumers suffer loss as a result of business actors’ negligence, they are liable to
provide compensation for damage, in the form of refunds or equivalent replacement of
goods/services in seven days after the date of transaction.29 Business actors are responsible
for their advertisements and all legal consequences caused by their advertisements. 30
Business actors who refuse, do not respond, or do not fulfill a consumer’s rightful
compensation can be sued through dispute settlement mechanism or to the district court
where the consumer domiciles.31
While it does not regulate consumer protection directly, it has provisions that
intersect with consumer protection as stated in Article 35 which regulates computer-
related fraud.
The law that regulates consumer protection in e-commerce is Law No. 7/2014 on
Trade which one of its implementing regulations is PP PMSE. PP PMSE is a regulation that
intersects with both consumer protection and cyberspace. It does have several provisions
that relate to consumer protection. It basically regulates electronic transactions that occur
through cyberspace between business actors, consumers, individuals, and government

25 Adam Dwi, “Hak Pelanggan Masih Terabaikan,” mediaindonesia, 3 September 2017,

https://mediaindonesia.com/humaniora/120597/hak-pelanggan-masih-terabaikan.
26 ibid. Article 9(1)
27 ibid. Article 10(a)
28 ibid. Article 17(1)(a)
29 ibid. Article 19
30 ibid. Article 20
31 ibid. Article 23

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32
institutions. The matter of e-commerce is included in this regulation. The regulation
requires business actors to provide true, clear, and honest information when performing e-
33
commerce transactions. The information must, at least, contain true and accurate
information; matching description between the advertisement and the actual goods;
34
condition, legality, quality, price, availability of goods/services. According to this
regulation, business actors must refer to UUPK to uphold consumer protection in e-
commerce transactions and provide complaint service for consumers.35
An e-commerce transaction is initiated by an offer made by a business actor to a
consumer. The offer is only binding if there is clear intention with honesty, fairness,
balance.36 It also has to explain how the consumer expresses their agreement. The
expression of agreement must be explicit and not ambiguous. An offer can be accepted if
they have fulfilled the previous requirements.37 An offer and an acceptance in cyberspace
result in an electronic contract.38 An electronic contract is valid if it is in accordance with
the offer made in the first place and Article 1320 of the Indonesian Civil Code. It should
contain the specification of the goods/service along with how and when it will be
delivered.39 When an electronic contract is made, the seller is bound to deliver what the
consumers had bought in a timely manner.40 If the seller made a mistake or missed a
deadline, then the consumer is entitled to a replacement or cancellation.41
Consumers can also report to the Indonesian Ministry of Trade if they suffer
damages when conducting an e-commerce transaction. Reported business actors are
required to settle the dispute. Failing to do so will result in them being placed on a
government priority watchlist.42

32 Article 4 of Government Regulation No. 80/2019 on Trade Through Electronic System

33 ibid. Article 13(1)
34 ibid. Article 13(2)
35 ibid. Article 26 & 27
36 ibid. Article 39(2)
37 ibid. Article 40
38 ibid. Article 47
39 ibid. Article 53
40 ibid. Article 63 & 64
41 ibid. Article 69(2)
42 ibid. Article 18

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E-commerce Consumer Protection Regulations Analysis

UUPK is a general legal foundation when it comes to the protection of consumers
but the problem is the enforcement is still ineffective. As seen in the GrabToko case, the
poor enforcement of the regulation resulted in the financial damages of GrabToko’s
consumers as well as confusion on what they are entitled to legally and what they can do
about it.
In 2016, the government created a system called digital reliability certification
which aims to analyze and observe a person on the internet and it is safe to use because it
uses data encryption so the data will not be leaked to unauthorized parties. This can be seen
as the use of a passport as a means of identification. This process is supervised by the
Certificate Authority, which manages and verifies the owner of an identity and makes it as
an identity certification. This certification can be used in proving their identity where the
data in this certificate has been encrypted and also can be sent to various parties. 43
Good faith and factual information play a major role in e-commerce transactions
since it is not possible for buyer and seller to physically interact with each other.
Consumers have to rely on the seller in that matter. In the GrabToko case, GrabToko
clearly did not exercise good faith and provide factual information. This resulted in the
breach of Article 4, Article 7, Article 9(1), Article 10(a), Article 17(1)(a). The problem
presented by the case is that the consumers have no way of verifying whether the
information provided by a seller is credible or not. Leaving the credibility of information to
chance and hoping that a seller will have good intentions will not work at all.
GrabToko should have paid damages to their consumers, according to Article 19 of
UUPK. The reality is that the consumers have not received any compensation for their
losses and the government failed to uphold their rights. GrabToko, as the injuring party,
already displayed a lack of good faith and hoping they will compensate their consumers
willingly is unlikely to happen. The government has to take action to force GrabToko to
give compensation. Otherwise, the consumers will stay uncompensated.

43 Rosadi & Tahira, “CONSUMER PROTECTION IN DIGITAL ECONOMY ERA,” p. 90

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UU ITE stipulates that electronic transactions must be based on, amongst all other,
benefit, prudence, and good faith.44 In the case of Grab Toko, the principle of good faith is
not exercised and obviously violated. Good faith is needed from both parties in order to
conduct a proper and smooth e-commerce without malicious intent. The incessant
advertising, promoting up to 90% discount, that appeared on national television broadcasts
as well as on large highway billboards45. After the consumers finished the transaction and
waited for the delivery, GrabToko’s Instagram cannot be accessed and the customer service
can no longer be contacted46. This proves that the advertisement was used to trap
consumers, fulfilling the element of bad faith in this case. Moreover, another sign of bad
faith from GrabToko is the fact that the owner of GrabToko uses his friend's name and
registered it as the commissioner of GrabToko without the person’s consent as clarified by
his friend personally.47 All of this points out that GrabToko has practiced bad faith and
violated the law as stated in UU ITE that every electronic system must be operated with
reliability and safety.48 This had not been done by GrabToko as they did not provide
reliable information and did not act responsibly for the damage.
E-commerce Consumer Protection Organizations in Indonesia
There are three main institutions when it comes to consumer protection in
Indonesia. The National Consumer Protection Institution (BPKN) is a governmental
organization mainly responsible for developing better consumer protection policy by
proposing recommendations to the Indonesian government.49 Other responsibilities include
research on existing regulations and consumer safety, supporting non-government
consumer protection institutions, disseminating information about consumer protection,
and receiving consumer complaints.50 It does receive consumer complaints but it does not
settle those cases using the alternative dispute resolution and adjudication process.

44 Article 3 & Article 17(2) of Law No. 11/2008 on Information and Electronic Transaction
45 Yanwardhana, op. cit.
46 “Kronologi Grab Toko Tipu 980 Orang dan Rugikan Rp17 M,” CNN Indonesia, op. cit.
47 Pertiwi, op. cit.
48 Article 15(1) of Law No. 11/2008 on Information and Electronic Transaction
49 ibid. Article 31 and 34(1) of Law No. 8/1999 on Consumer Protection
50 ibid. Article 34(1)

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According to UUPK, the institution that settle the consumer disputes using
alternative dispute resolution and adjudication processes is Consumer Dispute Settlement
Institution (BPSK). BPSK is directly responsible for handling consumer disputes settlement
through mediation, arbitration, or conciliation.51 BPSK is also responsible for providing
consultation on consumer protection, observing the use of standard contracts that might
affect consumers negatively, and reporting any infringement of UUPK to the authorities.52
In addition to settling the consumer dispute, Article 52 point e UUPK clearly states that
BPSK also has the task of receiving complaints from consumers regarding violations of
consumer protection.
Non-governmental Consumer Protection Organizations (LPKSM), such as Yayasan
Lembaga Konsumen Indonesia (YLKI), are also encouraged to help realize consumer
protection.53 The responsibilities of LPKSM include increasing consumers’ awareness of
their rights and obligations, providing advice on consumer protection, conducting
cooperation with other organizations to further improve consumer protection, receiving
consumer complaints, supervising the enforcement of consumer protection along with the
government and the public.54 Essentially, the role of LPKSM is to support BPKN and BPSK
in enhancing consumer protection.
Thus, based on their duties, it can be seen that the three institutions have duties
related to consumer protection and especially the three institutions have a similar task of
receiving consumer complaints. If it has become a dispute, then the consumer dispute
resolution can be settled through a lawsuit in court or an out-of-court settlement.
A lawsuit against a business actor can be filed by a consumer, consumer group,
non-governmental organization, or government agency if causing great material loss and
casualties.55 Specifically for consumer groups, NGOs and the government, lawsuits should

51 ibid. Article 52
52 ibid. Article 52
53 ibid. Article 44(2)
54 ibid. Article 44(3)
55 ibid. Article 46 (1)

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be filed through the general courts. As for individual consumers, they can settle through
the general courts or out of court settlement.56
Out of court settlement is held to reach a compensation or an injunction. 57 If an
out of court settlement has been selected, a lawsuit through the court can only be taken if
the out of court attempt is declared unsuccessful by one of the parties or by the disputing
parties.58 BPSK is an institution formed to resolve consumer disputes out of court.
E-commerce Consumer Protection Institution in the US
There are also several other international organizations that are involved in
safeguarding the rights of consumers. E-commerce consumer protection has become an
urgent matter due to the rapid technological advancement leading to digitalization of
transactions and every legal loophole that comes with it. TheUS Department of Justice and
Federal Trade Commission both have taken the lead in starting and establishing an
international organization with the aim to fight cybercrimes and protect consumers in
cyberspace by creating the Internet Crime Complaint Center (IC3). The IC3 is a special
reporting center created to settle internet-related crime under the Federal Bureau of
Investigation.59 Founded in 2000, it was previously known as Internet Fraud Complaint
Center until 2003. IC3’s mission is to provide a reliable and convenient cyber crime report
center for the public and work together with law enforcement and industry partners.60 IC3
defines cyber crime as:
“Internet crime includes any illegal activity involving one or more components of the Internet, such as
websites, chat rooms, and/or email. Internet crime involves the use of the Internet to communicate false
or fraudulent representations to consumers. These crimes may include, but are not limited to, advance-

56 ibid. Article 46 (2)

57 ibid. Article 47
58 ibid. Article 45 (4)
59 IFCC was created in May of 2000 with the support from National White Collar Crime and Federal
Bureau of Investigation and also collaborating with various agents and analysts from the Internal Revenue
Service and the US. Postal Inspection where they aim to achieve in becoming the pillar support and
establish an effective communication line between the government as the regulatory body and its
organization with the disadvantaged victims. With that goal, IFCC has a task in receiving, observing,
analyzing the schemes and complaints that they received in finding the most effective solution for the
customers and to deal with the internet crimes. Albert, “E-Buyer Beware,”
60 https://www.ic3.gov/Home/About#.

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fee schemes, non-delivery of goods or services, computer hacking, or employment/business opportunity

schemes.”61
Other cybercrimes include intellectual property rights infringements, computer
intrusions, economic espionage, online extortion, international money laundering, identity
theft, and many more.
Meanwhile, there is an intergovernmental organization which is the Organisation
for Economic Co-operation and Development (OECD) which issue policy guidelines that
are often used as references for other countries. This is an international organization that
aims to create policies that could be used as international standard that may improve the
opportunity, equality, prosperity and well-being of people by collaborating with several
parties, citizens, policy makers and governments by giving recommendations to solve
global issues, such as improving the economy, social life, quality of education, concerns on
environmental issues and fighting against tax evasions in order to provide the global
standard for the people around the world.62
E-commerce Consumer Protection Organization Analysis: Submission of
Dispute
It has become a common practice for the public that when they have a dispute as a
consumer, they might report it to BPKN, BPSK, or any LPKSM. BPSK is able to receive
consumer complaints in conjunction to be the dispute settlement organization.63 BPKN and
LPKSM have the same task of receiving consumer complaints according to Article 34(1)(f) and
Article 43(3)(d) of UUPK respectively. On the other hand, Article 18 of PP PMSE also grant
the authority to receive consumer complaints to the Ministry of Trade. This, however, might
result in the problem of duplication. BPKN and the Ministry’s authority to receive submissions
of disputes overlap with BPSK’s authority as the dispute settlement organization. Complaint
submissions that go through BPKN and the Ministry will have to be sent again to BPSK because
it is the organization that has authority to settle consumer disputes in the end.

61 https://www.ic3.gov/Home/FAQ#.
62 https://www.oecd.org/about/.
63 Article 52(e) of Law No. 8/1999 on Consumer Protection

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This might increase the chance for the cases to get lost during the process. The authority of
BPKN and the Ministry to receive the submission of consumer complaints creates
unnecessary layers of bureaucracy.
Minimalizing the layers and shortening the procedure should improve overall dispute
resolution efficiency. We propose consumer complaints should be submitted directly to BPSK.
The main reason is that BPSK representatives are already present in every district and city,
making it easier to access consumer complaints.64 This alone should provide enough coverage
for consumer access, eliminating the need for BPKN and the Ministry of Trade as a place for
complaint submission. BPKN and the Ministry of Trade should be focused on their other
responsibilities of policy making instead. Online Dispute Resolution can be implemented to
further reduce the need for multiple places of submission as the public could simply access
BPSK website to submit their cases, without having to visit BPSK office. BPSK office
construction should be prioritized for those who do not have access to the internet.
E-commerce Consumer Protection Organization Analysis: Legal Jurisdiction
of BPSK
BPSK is created to settle consumer transactions disputes. The BPKN has stated that
they have received around one hundred reports of consumer disputes related to the GrabToko
case based on the statement from Rizal E. Halim, the chairman of BPKN. 65 However, it has
been a couple of decades since UUPK was made back when e-commerce transactions were not
as apparent as they are now. Offline transactions are definitely within the jurisdiction of BPSK
but does the BPSK have jurisdiction to handle e-commerce disputes?
The formation of BPSK is based on Article 49(1) of UUPK and Ministerial Decree
of Trade and Commerce No. 350/MPP/Kep/12/2001 (SKMenperindag No. 350/2001)
which regulates that in every city or district, a BPSK must be established. One of the duties
given to BPSK is to carry out the handling and settlement of consumer disputes by means of
conciliation, mediation and arbitration according to Article 52 of UUPK.

64 ibid. Article 49
65 “BPKN Akan Cabut Izin Grab Toko Bila Terbukti Bersalah,” Warta Ekonomi, 12 Januari 2021,
https://www.wartaekonomi.co.id/read322395/bpkn-akan-cabut-izin-grab-toko-bila-terbukti-bersalah.

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Every consumer who has suffered damage can file a lawsuit against the business actor
through an institution with the authority to settle disputes between consumer and business
actor or through a court.66 Consumer within this context is the final consumer and so are the
GrabToko consumers. Both consumer and business actors must first agree to settle through
BPSK in order for BPSK to have jurisdiction over the dispute. If one of the parties does not
agree, BPSK cannot adjudicate the dispute. The lawsuit filed must be material in nature,
compensation for losses comes in the form of refunds and replacement of goods/services.
BPSK cannot settle a dispute involving non-material damages. In regard to the GrabToko case,
the consumers have paid but have not received their deserved products. Therefore, the
consumers of GrabToko have suffered material damages by fraud which is admissible.
UUPK does not specify whether it is exclusively regulated on traditional commerce
and there is no explicit differentiation between traditional and electronic commerce.
Substantially, BPSK can settle over a traditional commerce dispute as well as e-commerce
dispute as long as the aforementioned prerequisite is fulfilled. However, since traditional
commerce and electronic commerce are unique in their own way, a clear distinction
between the two should be made by coming up with a new regulation specifically on e-
commerce dispute settlement.
E-commerce Consumer Protection Organization Analysis: Importance of
Online Dispute Resolution in Indonesia
A reliable dispute settlement system in which consumers can count on in case they
have disputes is one of the fundamentals needed to gain consumers trust. E-commerce
transactions go beyond national borders and involve people overseas, thus an e-commerce
dispute resolution system that is available to people around the world regardless of their
nationality. The challenge here is establishing whose authority can take control of a dispute
settlement resolution.67

66 Article 45 of Law No. 8/1999 on Consumer Protection

67 Ioannis Lianos, et al., “The Global Governance of Online Consumer Protection and E-commerce Building
Trust,” World Economic Forum, (2019): p. 10,
http://www3.weforum.org/docs/WEF_consumer_protection.pdf.

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The European Union has decided to unify the procedures of dispute settlement to
make it simpler. Ever since then, many countries have created and developed their own
alternative dispute resolution system, for instance: China created the Asian Domain Name
Dispute Resolution Center (ADNDRC) and the Online Dispute Resolution Center at the
China International Economic and Trade Arbitration Commission (CIETAC). Singapore
launched DisputeManager.com which is recognized as the first ADR system out of all
ASEAN countries. Philippines where their ADR system is known as the most technological
ADR and many more.68
Online Dispute Resolution (ODR) is “a form of ADR which takes advantage of the
speed and convenience of the Internet and ICT”.69 ODR is a form of ADR that developed along
with the growth of e-commerce. Conventional ADR and ODR are not very different in
essence. The implementation of ODR is beneficial for ADR. The advantages of ODR are:
(1) it cuts costs and saves time because parties do not need to meet physically, (2) it provides
flexibility in terms of time as the parties arrange the best time that works for both, (3) it
enables the parties to have more control on how they want do the dispute settlement. 70
There are several types of dispute resolution methods such as dispute prevention,
ombudsman programs, conflict management, assisted negotiation, neutral assessment and
evaluation, mediation, arbitration, expert determination, customers programs and executive
tribunals. The typology of disputes can be classified into six categories.71
First, an unperceived injurious experience, where a consumer does not realize a
problem occurred with the product they transacted. Second, perceived injurious experience,

68
ibid. p. 19
69 Pablo Cortes, “The Hidden World of Consumer ADR: Redress and Behaviour,” (2011),
https://www.law.ox.ac.uk/sites/files/oxlaw/dr_pablo_cortes.pdf.
70
Meline Gerita Sitompul, et al., “ONLINE DISPUTE RESOLUTION (ODR): PROSPEK PENYELESAIAN
SENGKETA E-COMMERCE DI INDONESIA,” Jurnal Renaissance 1 no. 2 (2016): p. 90,
https://media.neliti.com/media/publications/255784-online-dispute-resolution-odr-prospek-pe-
52db2b41.pdf.
71 American Bar Association's Task Force on Electronic Commerce and Alternative Dispute Resolution in
Cooperation with the Shidler Center for Law, Commerce and Technology, University of Washington School
of Law, "Addressing Disputes in Electronic Commerce: Final Recommendations and Report," The
Business Lawyer 58, no. 1 (2002): p. 434,
https://www.jstor.org/stable/pdf/40688128.pdf?ab_segments=0%252FSYC-
5917%252Ftest&refreqid=excelsior%3A94162e91dd147931f0bed8e3bd7bb61a.

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the problem has been realized by the consumer but never asks for a remedy due to self-
blaming of guilt. Third, grievances, is a condition where customers feel that their rights
have been violated and they will not do another transaction with the same merchant again
but the complaint is not voiced.72 Fourth, claims and complaints, are basically grievances
that are voiced by the customer to the merchant but it does not involve legal proceedings
and the merchant will try to provide remedy in order to gain back the consumer's trust for
future transactions. Fifth, dispute, is a complaint that has been rejected either partially or
fully by the merchant and the customer usually takes the loss and avoids doing transactions
with the merchant in the future. Sixth, disputes voice to third parties, this is the stage
where customers who feel dissatisfied with the violation of their rights ask for the assistance
of third parties, such as lawyers, government institutions, merchant associations. Seventh,
formal dispute resolution consists of ADR and lawsuits, this is the very top of level of
consumer dispute where in this stage, the consumers together with third parties have
advanced further in the legal process of dispute settlement procedure.73
Typical e-commerce cases of online dispute resolution are mainly caused by the
inability to effectively protect consumers, like misuse of credit and debit cards; late or no
delivery of purchased goods; internet fraud; hidden illegal cost by merchants; unclear rules
and procedures; merchant websites lack credible certification of policy; no restriction on
personal data; consumers' privacy failure; lack of information.74
There is actually a regulatory framework that can act as the foundation of ODR in
Indonesia, which is Law No. 30/1999 on Arbitration and Alternative Dispute Settlement (UU
AAPS) since ODR is basically another form of ADR that has been infused with digitalization.
The regulation regulates dispute settlement in a dispute between parties through the process of
mediation, consultation, conciliation and many more, where all these methods are used to
settle disputes a verdict is reached, and finally concluding the disputes.75 Alternative dispute
resolution is a dispute resolution institution through a procedure agreed

72 ibid., p. 424
73 ibid.
74 ibid. p. 429
75 Article 2 and Article 6 of Law No. 30/1999 on Arbitration and Alternative Dispute Settlement

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upon by the parties, namely settlement outside the court by means of consultation,
76
negotiation, mediation, conciliation, or expert judgment. The sentence “...through a
procedure agreed upon by the parties...” means that the regulation does not specifically
state that arbitration must be done offline. This opens up the possibility of ODR.
UU ITE states that civil lawsuits disputes may be resolved through alternative dispute
resolution in accordance with the provisions of Indonesian regulations. 77 This provision
should also open up the possibility of ODR.
PP PMSE states that in the event of a dispute, it can be settled through a dispute
resolution mechanism that is not limited to offline mechanisms but it is possible to do it
electronically or, in other words, online dispute resolution.78 It is regulated that the parties
are able to choose the law which will be applied for international e-commerce transactions.
It will also be used to determine court forum, arbitration, or other alternative dispute
resolution to handle disputes.
OECD sets up general principles and recommendations to provide effective and clear
transactions for consumers by analyzing mechanisms that need improving to achieve this goal. It
could be transformation from government, regulation, or consumers' aspect regarding
socialization of data privacy, payment transparency, and many more. First, the importance of
transparency and effective protection for the customers. It is necessary for sellers to give
reliable information to the consumers according to the standards set by OECD, by
collaborating with governments and stakeholders to achieve such protection standards to
protect consumers in e-commerce transactions. Second, related with reliable information, it is
the availability of information to be accessed by consumers about the business, creating
effective communication between seller and consumers by providing information of business
location, address, email address, contact, websites, legal documents. Third, providing an
effective and transparent dispute resolution mechanism and redress both locally and

76 ibid. Article 1(10)

77 Article 39 of Law No. 11/2008 on Information and Electronic Transaction
78 Article 72 of Government Regulation No. 80/2019 on Trade Through Electronic System

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internationally which are affiliated with cross-border transactions.79 These are the standard
principles created by international organizations with the aim to secure and protect the
rights of consumers in e-commerce transactions.
For comparison, the United States has created the American Arbitration Association
(AAA) which has incorporated ODR into their arbitration services called Virtual Hearing
Managed Service.80 Basically, the AAA has established an online arbitration system using
video meetings.
AAA has principles that ensure the alternative dispute resolution process runs
smoothly. First, the avoidance of conflict of interest in a dispute resolution, where the staff
members do not write and review awards, arbitrators and mediators are bound by the code
of ethics and standard of conduct. Both of them must disclose their interest and relationship
once chosen. Arbitrator impartiality is strictly oversight to prevent bias. Parties may use
other statutory or other methods besides the ones provided by AAA and parties may also
object to an arbitrator chosen by AAA.81
Second, conflict management, where AAA manages conflict settlements by
facilitating conferences, publications, training, ADR guides, and sample clauses. AAA also
provides its own contract in providing many variations of conflict dispute management.
Especially for employees, it is solved by the Smart Solution Program where it is specially
focused to handle non-union employees.
Third, confidentiality, as AAA staff and neutrals are obliged to keep confidential
information private and individual arbitration may be closed if it is agreed by the parties but
regulation and procedures are available publicly on the web.82
Fourth, diversity and inclusion, the AAA prioritizes diversity and inclusion to hire
its neutrals staffs, directors, business executors, partners, conflict professionals. In seeking
advice, AAA also focused on diverse committees.

79 OECD, Consumer Protection in E-commerce: OECD Recommendation (Paris: OECD Publishing, 2016),
https://www.oecd.org/sti/consumer/ECommerce-Recommendation-2016.pdf.
80 https://www.adr.org/virtual-hearing-managed-services.
81 https://www.adr.org/StatementofEthicalPrinciples
82 ibid.

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Fifth, proficient neutrals, AAA set a high standard on recruiting neutrals, which is
regularly evaluated, provided with mandatory training, provides high criteria level of
obligations and procedures in selecting mediator and arbitrators, neutrals also have their
own distinguish and individual speciality.83
Sixth, financial integrity, AAA provides their own professional independent financial
accountants, employees are obliged to comply with standards of ethics and business conduct.
Compensations are only received after the case is handled, the assets are managed by external
independent parties, the performance of the portfolio and its compliance with the investment
policy is monitored by the investment committee and aside from public information, financial
private information are unavailable to public including mediators and arbitrators.
Seventh, impartiality, directors and neutrals are not given special treatment in
filing cases and doing their services and it is proven 95% of the cases are based on the name
of administrative agency in clause, legislation, citations and rules in websites.84
Eighth, information disclosure and dissemination, president’s letter and financial
statements that have been audited are disclosed, provides a website which gives information
to the public, fees of service are published on the web and presented to clients.
Ninth, accessible process, there will be a fee reduction if it is proven that there is a
financial issue with the party, for claims and counterclaims maximize at $10.000 the fee of
arbitrators are fixed in only $750, fee of business consumer claim is not more than $200.85
Tenth, due process and fairness standard, in doing the cases, AAA managements
are guided by the due process protocols, AAA reviews the contract clauses if it is found that
deviates from the Consumer Due Process Protocol for cases under $75.000 and it may
reject if it does not abide to the protocols set by AAA.
Eleventh, clients complaints and feedback, as clients, parties, neutral may address
any complaints and feedback by contacting case managers, vice presidents, and supervisors,

83 ibid.
84 ibid.
85 ibid.

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AAA regularly asking feedback by conducting surveys from educational program attendees
and caseloads regarding their service.86
A comparative analysis in accordance with UUPK, UU ITE, PP PMSE and UU
AAPS shows that there are several principles that are not present in Indonesian regulations
related to ODR.
The first principle of OECD and AAA, and the eight principles of AAA about
transparency have been regulated in Article 3, Article 10(a), Article 17(1)(a), Article 20 of
UUPK and Article 13(1) and (2) of PP PMSE. Reliable information under the second principle
of OECD and the sixth principle of AAA have been regulated in Article 3, Article 4, Article 7,
Article 9(1), Article 10(a), Article 17(1)(a), Article 20 of UUPK, Article 15(1) of UU ITE,
Article 13(1) and (2) of PP PMSE. The third principle of OECD and all principles of AAA on
effective dispute resolution mechanisms have been regulated in Article 4 and Article 23 of
UUPK, also incorporated in UU AAPS as the legal basis of arbitration
procedures in Indonesia. AAA’s first principle on avoidance of conflict of interest is regulated
under Article 18, Article 22, Article 24 of UU AAPS. Conflict management in the second
principle of AAA is regulated in Article 4 of UUPK. Diversity and inclusion, based on the
fourth principle of AAA, have been regulated in Article 4 of UUPK. Customer’s complaints
and feedback in the tenth principle of AAA have been regulated in Article 4 and Article 19 of
UUPK along with Article 18, Article 26, Article 27 of PP PMSE.
Meanwhile, principles that are not present in current Indonesian regulations is the
third principle of AAA about confidentiality; the fifth principle of AAA about proficient
neutrals; the sixth principle of AAA about financial integrity; the seventh principle of AAA
about impartiality; the eighth principle of AAA about accessible process; and the ninth
principle of AAA about due process and fairness.
In conclusion, it is worth considering to include these principles in the current
regulations to accommodate ODR in Indonesia in the near future.

86 ibid.

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The Benefits of Technology for Consumer Protection

Consumers’ trust is a key factor in e-commerce transactions and the application of
the right technology may help strengthen this, for example, trustmark seals. Trustmark
seals is an auditing service to ensure a business and its policies on consumer protection are
adequate enough to guarantee it. Approved businesses will be given certification on their
order and shipping process, security and privacy, as well as return policies.
TRUSTe and BBOnline are organizations that assess businesses regarding their
disclosure and privacy standards as well as providing dispute resolution systems for
87
safeguarding the rights of consumers. The Ecommerce Europe Trustmark unifies and
creates clear procedures by making a set of regulations and ensures consumers are aware of
their rights. The organization aims to safeguard consumers when they are doing online
transactions. More than ten thousand online stores have applied for their trustmark seal.88
Trustmark seals help consumers be sure of the merchants they are dealing with.
Trustmark seals also ensures that merchants complies with the best practice in terms of
marketing practices, information about the goods/services and its transaction, security,
accuracy and accessibility of information, privacy, cancellation/return/refund policies,
complaints handling, redress or dispute resolution, warranty, unsolicited e-mail, customer
service and/or support, and information about the merchant. Trustmark seals set the
standard in electronic transactions and it helps customers feel safe and confident.
Trustmark seals organizations are recommended to provide regular surveillance of
merchant’s compliance with the trustmark, by doing verification, auditing, and report.89
Therefore, it is important for trustmark seals to be implemented in Indonesia through
regulations if Indonesia wants to benefit from the growing e-commerce.

87 Patton & Jøsang, “Technologies for Trust,”

88 https://www.ecommercetrustmark.eu/
89 American Bar Association, "Addressing Disputes in Electronic Commerce," p. 438

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CONCLUSION
The regulations related to consumer protection are outdated but, substantially, it holds
the essence of consumer protection that should protect consumers. While the regulations
may be inconsistent or contradict other regulations, the rights of consumers have been
clearly stated in the regulations. The problem is ineffective enforcement. A law is useless if
it cannot be enforced.
To prevent a problem like the GrabToko case from happening again, the government
should tighten up the corporation registration process to minimize as many ill-intended
corporations as possible in the market. A strict process does not have to be inefficient. This
should allow consumers not having to worry whether a corporation is legitimate or not as the
number of illegitimate corporations should be suppressed. Alternatively, the government could
give a sign to corporations that have gone through extensive background checks. The sign
should be easily identified by consumers without much effort for them. Consumer awareness of
their rights and their capability to protect themselves against fraudulent corporations are also
important factors but it has not been successfully socialized.
As it stands right now, consumer protection organizations are not capable and well
organized to do their responsibilities, evidently so from the GrabToko case. The consumers
were deceived and the law failed to protect and compensate them. Changes should be made
in order to improve their effectiveness and efficiency.
Even with multiple complaint services, the consumers did not manage to get their
rightful compensation. It is also not efficient in terms of administration. All consumer
disputes should be directed to BPSK because it is the organization with the authority to
settle those disputes. BPKN and LPKSM should be focused on their other responsibilities
and leave dispute settlement to BPSK. The implementation of ODR should help BPSK in
providing protection to consumers. Consumers could simply submit their complaints
through a single channel. Physical offices should be prioritized for cities that do not have
access to the internet.
As for its jurisdiction, the regulations do not differentiate between traditional transactions
and e-commerce transactions. As long as the requirements in the regulations are

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fulfilled, BPSK should be able to settle both kinds of transactions. Still, e-commerce
transactions are unique in their own ways, UUPK should be amended accordingly to
address e-commerce transactions.
ODR should be implemented in Indonesia because it has significant benefits for dispute
settlement. Several Indonesian regulations already serves as a foundation for ODR, like UU
AAPS and PP PMSE. There are international organizations that already exercise ODR and
they can be used as reference. While Indonesia has regulations that could serve as the
foundation for ODR, it is not a concrete foundation yet. The existing regulations do not
differentiate between conventional commerce dispute resolution and e-commerce dispute
resolution. E-commerce is a complex matter by itself. It needs further legal reinforcement
by enacting a new regulation specifically for ODR. There is no institution that handles
ODR. If there is a specific regulation on ODR, there should also be an institution for it too.
The institution could be independent or it could be placed under BANI. In order for ODR
to work, the public will need access to it which requires an electronic device and adequate
internet connection that not all people have because of underdeveloped infrastructure.
As discussed above, it is important for trustmark seals to be implemented in Indonesia.
The implementation of trustmark seals has been proven in Europe hence why it should be
applied in Indonesia. With a growing e-commerce, a better security measure should be
considered to minimize further fraudulent transactions. On the other hand, it will
encourage merchants to practice good business ethics.
Therefore, the government should join in this matter by formulating and enacting a
regulation on trustmark seals to encourage the use of trustmark in Indonesia along with an
institution to supervise it. Another reason is the right of consumers to receive legal
protection in their transactions. A proper trustmark regulation must be thought carefully as
to not leave any gap for abuse by malevolent parties which will cause losses for consumers.

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BIBLIOGRAPHY

Books

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Law No. 11/208 on Information and Electronic Transaction

Law No. 30/1999 on Alternative Dispute Settlement

Law No. 8/1999 on Consumer Protection

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