How Indonesia’s Content Governance Could UndermineIts Economy

Indonesia’s digital frontier is booming. But restrictive content regulations, such as arbitrary takedowns, threaten to dampen that growth. Indonesia stands to lose millions of dollars from internet censorship and access blocks.

Indonesia’s content governance

Last year, the Indonesian government expanded its online content governance through the Ministerial Decree No. 522/2024, issued under the then-Communications and Informatics Ministry. The Decree builds upon the widely criticized Ministerial Regulation No. 5/2020 (MR5), which compelled digital platforms to grant government access to user data and comply with vague takedown orders.

It also introduces the Content Moderation Compliance System (SAMAN) to monitor social media platforms’ compliance with removing offensive material and illicit content, particularly those linked to child pornography and terrorism.

The onus is on the platforms to take down flagged content, with only 4 to 24 hours to respond after receiving government notification through the SAMAN portal. Failure to comply will incur steep fines up to IDR 500 million per content and eventual government blocking for repeat lapses.

The Digital Ministry touts SAMAN as transparent and secure because platforms can file appeals. Yet sources within the industry have pointed out that SAMAN has yet to obtain an ISO 27001 certification, vital to securely facilitate API integration. With a troubling record of data leaks, platforms are understandably wary of linking their API with SAMAN’s.

Analysts also warned that the current content governance broad mandates amount to de facto pre-publication censorship. With no independent checks, the Digital Ministry serves as the rulemaker, enforcer, and judge who issues penalties. Such concentration of power encourages over-censorship and strips platforms of due process.

The power imbalance endangers users’ already fragile freedom of expression—enabled by the ITE Law—and risks turning Indonesia’s digital space into a tool for political manipulation. In a polarized climate, safeguarding the digital realm from unchecked censorship and abuse must be a priority from the outset.

Hidden cost of restrictive content regulation

Indonesia’s censorship-driven approach—strict deadlines, centralized power, hefty fines—mirrors Germany’s 2017 NetzDG. Emerging evidence suggests that most content removal requests mandated by NetzDG were ineffective and imposed substantial resource burdens for platforms.

In 2022, YouTube, Facebook, Instagram and X, received over 2.7 million complaints under NetzDG. Almost all were either false positives, duplicative, or already covered by platform community guidelines. The broader economic impact cost over USD 22.25 million annually (roughly USD 4,336 per takedown) and required 441 full-time staff across the four major platforms. Yet the overall volume of harmful content removed under the NetzDG regime was minimal, less than 0.000000215% of user-generated content instances.

The new SAMAN enforcement comes amid a fragile investor climate in Indonesia’s digital sector. According to Tech in Asia, investment fell from USD 10.9 billion in 2021 to only USD 800 million in 2024. Last quarter alone, funding dropped to USD 60 million across 13 deals and late-stage funding shrank by 99.1%, from USD 7.51 billion in 2021 to USD 70 million in 2024.

Regionally, Indonesia’s share of Southeast Asia’s startup funding shrank from 40.3% in 2021 to just 9.6% in 2024. The outlook looks bleaker, especially in light of financial misconduct and regulatory breaches involving high-profile startups, i.e., fintech lending pioneer Investree and aquatech unicorn eFishery.

Indeed, online services account for a significant portion of Indonesia’s USD 130 billion digital economy, a growth largely accelerated by the pandemic. Disrupting these services risks devastating economic fallout.

A two-week total shutdown in Papua in 2019, which was ruled unlawful by the Jakarta State Administrative Court, disconnected 1.46 million Papuans online and inflicted millions of dollars in economic losses across various online services. Google alone lost an estimated USD 13,000 per day in advertising revenue.

Tools like NetLoss Calculator estimate that a one-day internet shutdown in Indonesia in 2025 could cause USD 53 million in GDP loss and USD 7 million for blocking online services, potentially disrupting Indonesia’s USD 360 billion digital ambition. The Cost of Shutdown Tool adds that each hour of blackout costs USD 6 million, while platform blocks cost USD 706,000 per hour. Such disruptions also push unemployment up by 7 to 52 individuals per day.

Going forward

Indonesia’s path to a USD 360 billion digital economy by 2030 depends on good governance that respects free expression, promotes innovation, and ensures open and accessible internet for all Indonesians. To that end, below are several points to ponder.

First, MR5 must be amended. Specifically, Article 9(4)b should be revoked or, at minimum, redefine the “public unrest” clause with narrowed criteria and precise legal language so platforms know exactly what to police.

Platform must also be made explicitly responsible for protecting vulnerable users, especially children. No amount of profit should justify the social or reputational harm of neglecting child protection. Meanwhile, Article 11 should also be adjusted to provide greater immunity to ESOs that have complied with the regulation.

Next, improve SAMAN’s framework before full launch. Certifying it to global standards like ISO 27001, defining data protocols and streamlining institutional roles will boost platform trust. The framework should also have a built-in pre-enforcement appeal process supported by an independent review panel to ensure due process.

Equally important, Indonesia should prioritize enacting an expanded Anti-SLAPP law (Anti-Strategic Lawsuit Against Public Participation) to safeguard free speech and civic engagement in the digital space. Such legislation could serve as a counterbalance against the overreach of the ITE Law by protecting digital rights activists from unjust defamation claims and legal harassment.

Finally, Indonesia should adopt a formal co-governance approach, modeled on New Zealand’s Online Safety Code committee, bringing together relevant stakeholders to continuously improve content governance and ensure policies reflect local realities while upholding global rights standards.