Minister of MSMEs Regulation No. 3 of 2026 Boosts MSME Competitiveness, Digital Platforms Required to Reduce Service Fees by 50%

Introduction

On 15 June 2026, the Ministry of Micro, Small, and Medium Enterprises issued Minister of Micro, Small, and Medium Enterprises Regulation Number 3 of 2026 on the Protection and Enhancement of the Competitiveness of Micro and Small Enterprises in Trade Through Electronic Systems (“MSME Regulation 3/2026”), which took effect on 17 June 2026. This regulation provides legal certainty, comprehensive protection, and serves as a guideline for the Central Government, Regional Governments, Electronic Commerce Operators (“PPMSE”), and Micro and Small Enterprises (“MSEs”) within the digital ecosystem.

The Government recognizes the strategic role of MSEs in driving economic growth and promoting equitable economic development in Indonesia. However, when entering digital markets or e-commerce platforms, MSEs often face unequal competition from imported products and large-scale business with stronger resources and competitiveness. MSME Regulation 3/2026 governs the protection of MSEs within the digital marketplace.

Key Provisions

Protection Rights of MSEs in the Digital Marketplace

Pursuant to Article 3 paragraph (1), MSEs conducting business through digital platforms are now granted specific rights. These rights include:

a. fair, transparent, and non-prejudicial Digital-Based Partnership Agreements (“KBD”);

b. guarantees of data and transaction security;

c. protection from monopolistic practices and unfair business competition;

d. legal education, consultation, assistance, legal support, and mediation;

e. clear information prior to entering into a KBD with a PPMSE, including service fee schemes, deductions, and operational mechanisms;

f. protection against unilateral termination of partnerships without legitimate grounds;

g. protection from algorithmic discrimination or promotional policies that hinder market access;

h. protection from deductions or additional charges that have not been agreed upon;

i. assurance of social security protection for their employees/workers; and

j. entitlement to incentives in accordance with prevailing laws and regulations.

Obligations of MSEs to Advance Their Business Capacity

To obtain all of the protection rights above, Article 3 paragraph (2) stipulates obligations and criteria that must be fulfilled by MSEs. MSEs may no longer simply engage in business activities without legal identification; instead, they must actively participate in capacity-building programs organized by the government or digital platforms. Furthermore, Article 3 paragraph (2) requires MSEs to satisfy the following requirements:

a.  possess a Business Identification Number (“NIB”);

b. consistently comply with the provisions of the KBD;

c. provide accurate, clear, and non-misleading information to PPMSEs and consumers;

d. prioritize the sale of Domestic Products that comply with quality and safety standards;

e. maintain a good track record in business partnerships and be capable of fulfilling orders or services within the agreed timeframe and quality standards;

f. be officially registered in the national information platform, namely the Micro, Small, and Medium Enterprises Service Application System (“SAPA UMKM”);

g. ensure that all employees or workers are actively enrolled in social security programs (BPJS Employment for Work Accident Insurance and Death Benefits, and BPJS Health); and

h. strictly refrain from manipulating transactions (fake orders) or misusing e-commerce platform facilities.

i. actively participate in capacity-building programs organized by the government and/or PPMSEs.

Obligations of Digital Marketplace Platform Operators (PPMSEs)

Article 3 paragraph (3) provides that e-commerce operators or digital platforms are required to assist MSEs in obtaining NIBs, integrate their systems with SAPA UMKM, and are prohibited from manipulating transactions or financial data. Platforms are also prohibited from imposing commission deductions or additional charges outside the scope of the initial written agreement and must provide fair promotional opportunities for Domestic Products.

Standard Requirements for Digital-Based Partnership Agreements (KBD)

Article 4 stipulates that cooperation between MSEs and digital platforms must be documented in a written agreement drafted in the Indonesian language and based on the principles of equality, transparency, fairness, and ecosystem sustainability. Under Article 5 paragraph (1), such agreements may not be prepared arbitrarily and must contain minimum standard clauses. Pursuant to Article 5 paragraph (1), the mandatory minimum clauses include ten key elements: the identities of the parties, scope of cooperation, rights and obligations, duration of the cooperation, types and amounts of fees, transaction payment mechanisms, contract termination procedures, dispute resolution mechanisms, force majeure provisions, and forms of business development support for MSEs.

The provisions concerning the mandatory minimum contractual clauses are set out in the Annex to MSME Regulation 3/2026. The agreement may be executed in physical form or as an electronic document in the form of Terms & Conditions approved through an application, provided that the contents are transparent and remain accessible to MSEs at any time (Article 6).

Fee Structure and Service Fee Negotiation Mechanisms

Articles 7 and 8 provide that fees imposed on MSEs must adhere to the principles of reasonableness, transparency, certainty, and affordability. Permissible fees are limited to registration fees (which may only be charged once), Service Fees (transaction commissions/administrative charges), and optional advertising fees where MSEs seek to increase product visibility. Furthermore, Article 9 paragraph (1) emphasizes that if a platform intends to increase or modify service fees, it must announce such changes no later than 90 calendar days before they take effect. If an MSE objects to the fee increase, Article 9 paragraph (2) provides that the MSE may submit a request for facilitated negotiations directly to the Minister through the SAPA UMKM system in order to reach a mutually binding agreement.

50% Commission Reduction Incentive for Domestic Products

Article 15 paragraph (1) introduces an incentive aimed at increasing the sales of local products. The provision requires large-scale digital platforms (non-MSEs) to grant a minimum 50% (fifty percent) reduction in Service Fees to verified MSEs that exclusively sell Domestic Products. This commission discount applies to every transaction involving local products.

However, Article 15 paragraph (3) stipulates that this fee reduction incentive does not apply to MSEs selling the following categories of commodities:

1. Ready-to-eat processed food products (fast food and beverages); and

2. Electronic products manufactured by large-scale domestic industries.

Under Article 16, MSEs must apply for this discount through SAPA UMKM, after which the application will be verified by the relevant ministry unit. In addition, Article 17 provides that the incentive may be immediately revoked if an MSE is found to be offering foreign products through its store.

Government Oversight and Legal Sanctions

Articles 18 through 20 regulate the Ministry’s monitoring and evaluation of the implementation of measures aimed at protecting and enhancing the competitiveness of MSEs in electronic commerce. Monitoring is conducted continuously, while evaluations must be carried out periodically at least once within a one-year period.

Where monitoring identifies violations by digital platforms, such as failure to provide the required 50% commission reduction to MSEs or unilateral changes to service fees, the Minister may impose administrative sanctions progressively. Such sanctions may include written warnings, recommendations for supervision by the Business Competition Supervisory Commission (“KPPU”), public disclosure of violations, and recommendations for the revocation of the relevant digital platform’s business license.

Conversely, digital platforms that comply with the regulation will receive recognition and promotional support from the Ministry as provided under Article 21.

Transitional Provisions

Pursuant to Article 22, the provisions governing the requirement for written agreements (Article 4), minimum contractual clause standards (Article 5), the mandatory 50% service fee reduction (Article 15), verification through SAPA UMKM (Article 16), and sanctions involving the termination of incentives (Article 17) will become effective on 17 December 2026.

Accordingly, MSEs and PPMSEs are afforded until mid-December 2026 to adjust their systems, partnership agreements, and other administrative requirements to ensure compliance with this regulation.

Closing

MSME Regulation 3/2026 strengthens the protection and empowerment of MSEs within the digital commerce ecosystem. The regulation requires PPMSEs to provide more equitable support to MSEs, including through the regulation of commission fees, promotional transparency, and advance notification of service fee changes.

At the same time, MSEs are encouraged to improve compliance by fulfilling business licensing requirements and integrating with the government-provided digital ecosystem. Given the limited transitional period, both PPMSEs and MSEs should promptly undertake the necessary adjustments to ensure compliance with the applicable requirements and avoid the risk of administrative sanctions.