PayPal, Yahoo, Epic Games are early casualties of new regulations in Indonesia

• Payments giant PayPal were briefly blocked in Indonesia for its failure to register themselves as required by the country’s MR5 ruling.
• Even several gaming websites and search engine website Yahoo have been blocked–signaling Indonesia’s seriousness in keeping up with its promise to bar services that fail to comply.

In November 2020, Indonesia introduced a new set of strict internet regulations that drastically tightened the government’s control over the online space in Southeast Asia’s most populous country. The rules initially required technology companies, both at home and overseas, to register themselves by July 27 this year, if they wish to continue operating in the country. While thousands have complied with the ruling, search engine website Yahoo, payments firm Paypal and several gaming websites failed to do so–before the due date.

For starters, with an estimated 191 million internet users and a young, social-media savvy population, the Southeast Asian nation has been a significant market for a host of tech platforms. That said, under new regulations issued by Indonesia’s Ministry of Communication and Information Technology, social media and internet platforms including Google, Facebook, Twitter, YouTube, and TikTok, will be required to hand over user data and comply with government content moderation orders.

The requirement is part of an overarching law, called Ministerial Regulation 5 (MR5), which was first introduced in 2020. The government claims that the regulation, first aims to protect domestic users from prohibited content, which is defined as anything that violates laws, causes public unease, or disrupts public order. It will apply to all companies that provide online services, engage in online businesses, or whose online platforms are used in Indonesia, including some of the world’s largest tech companies.

As noted by Reuters, the laws give the Indonesian government the ability to obtain data about specific users, as well as coerce companies into removing content that “disturbs public order” or is considered illegal. Platforms have four hours to take action on “urgent” removal requests, or 24 hours in the case of any other content.  

Several tech companies had rushed to register as Private Scope Electronic System Operators – a designation that certifies they’ve complied with local security and privacy requirements – in days leading to the deadline, which was eventually extended until Friday (July 29). The tech giants include Alphabet, Facebook, Instagram, WhatsApp and Amazon.com. A senior official at Indonesia’s Communication Ministry Semuel Abrijani Pangerapan shared in a text message websites that have been blocked including Yahoo, Paypal and gaming websites like Steam, Dota2, Counter-Strike and EpicGames.

The quick move of blocking websites like PayPal operating in Indonesia signals that the authorities are not taking its regulations lightly–making good on promises to bar internet services that don’t register locally and submit to a tightening regulatory regime. Pangerapan did note that the ban will be lifted once the companies register with the country’s database. 

It’s unclear when these services will come back online, or if they’ll register with the Indonesian database. As for PayPal, according to its website, the US firm was only briefly barred in Indonesia, before the government backtracked to give the digital wallet operator an additional five days to submit its paperwork. As of writing time, other websites that have been blocked have not shared any update on the resumption of its services in Indonesia.