It looks like Netflix was just the beginning. The Indonesian government recently announced their plan to force over-the-top (OTT) content providers like Facebook, Twitter, Google, and lots of other essential digital services, to open up permanent businesses in Indonesia or risk being blocked in the country.
Although both Twitter and Facebook have representative offices here in Jakarta, Minister of Communications and Information, Rudiantara, yesterday said that these internet giants must have a legal entity and permanent business status in Indonesia so that they can be accountable to answer customer complaints.
“If there’s any violation [on the part of the OTT], where are [customers] going to complain to?” Rudiantara said, as quoted by Kontan yesterday.
In addition, as most cynics have probably already guessed, this regulation would enable the government to milk these online companies for tax money.
“They pay their taxes abroad. It’s not fair,” Rudiantara said.
He said the new regulation will come into effect in March, and those who fail to comply will face the risk of being blocked in Indonesia.
Presidential Chief of Staff Teten Masduki assured the public that such a scenario was unlikely because many companies, including Facebook, Twitter, and Google, have pledged their cooperation in the matter to President Jokowi during his visit to Silicon Valley last week.
His statement is at odds with what Facebook founder and CEO Mark Zuckerberg had to say about government regulation during the Mobile World Congress in Barcelona a couple of days ago. Zuckerberg argued that his company differs from traditional network operators because they don’t have to build physical infrastructure like telecom providers. However, telecoms and governments can still reap the benefits from Facebook traffic in the form of revenue and subsequent taxes from internet data sales.
It seems highly unlikely that we’ll lose access to Facebook, Twitter, Google (AKA most of the internet) even if they don’t comply with this new protectionist policy – doing so would cause a huge public uproar. And we know from Tumblr’s case that the government still listens (although often reactively) to public demand.
