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Taking aim at foreign goods, ministry vows to tackle ‘price manipulation’
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Trade Minister Muhammad Lutfi hands over a document to House Speaker Puan Maharani after legislators approved a draft bill in Jakarta on April 9. (Courtesy of Trade Ministry)
T
he Trade Ministry is devising new rules on e-commerce with the aim of protecting domestic producers against alleged predatory pricing by importers.
“Under the proposed revision to Trade Ministry Regulation No. 50/2020, vendors on e-commerce platforms will need to disclose their country of origin,” Trade Ministry Domestic Trade Director General Oke Nurwan told The Jakarta Post in a text message on Wednesday.
Oke dismissed the notion that the move was protectionist, arguing that the new regulation would create a level playing field for foreign and domestic sellers. Both would need to comply with Indonesian standards and Indonesian trade laws. This would ensure that any “cheating foreign sellers” could not outcompete Indonesian small businesses on e-commerce platforms.
The ministry says it also plans to regulate discounts offered on the platforms with the aim of creating fair rules for online and offline sellers.
“It is quite possible that predatory pricing commonly occurs on e-commerce platforms, but it’s very hard to prove that such practices are happening,” Center of Reform on Economics (CORE) executive director Mohammad Faisal told the Post in a phone call on Wednesday.
Proving predatory pricing would require a comprehensive investigation into how sellers produced their goods and, more importantly, whether they cut prices until their competitors left the platform, only to hike the prices afterward, he added.
According to Mohammad, it is crucial for the government to have all the necessary data on sellers on the platforms, including their country of origin. However, he argued that the government needed to play a proactive role, since relying on reports alone was ineffective because many of the wronged parties would remain silent.
