Indonesia Questions Cloudflare’s Role Under New PSE Regulations

• Cloudflare reviews Indonesian registration rules amid government concerns over content moderation.
• Komdigi emphasizes all PSEs must comply, even infrastructure providers without content curation.
• Unclear regulations leave foreign firms unsure of obligations under Indonesia’s broad PSE law.
• Enforcement could disrupt services, highlighting challenges for foreign digital platforms in Indonesia.

Cloudflare, the U.S.-based internet infrastructure provider known for cybersecurity and web performance services, recently held a virtual meeting with Indonesia’s Ministry of Communication and Digital (Komdigi) to discuss compliance with the country’s private electronic system operator (PSE) regulations.

The session, which took place on November 25, included Komdigi officials and Cloudflare’s Asia-Pacific public policy leaders.

The discussion focused on Cloudflare’s obligations under Indonesia’s PSE framework and explored potential cooperation on content moderation, especially concerning illegal or disruptive digital content. Cloudflare indicated a willingness to set up a dedicated reporting channel to assist Komdigi in monitoring such content, while also emphasizing its role as an infrastructure provider that does not curate online content.

Ambiguities in PSE Rules

Indonesia’s PSE rules, outlined in Ministerial Regulation 5/2020, require both domestic and foreign online service operators to register with the government. Failure to comply may result in warnings, service suspension, or outright blocking. The regulation also mandates that content “inciting unrest” or “disturbing public order” must be removed within 24 hours.

However, the rules’ applicability to infrastructure providers like Cloudflare remains unclear. Unlike platforms that host or publish content, Cloudflare primarily manages security and performance, raising questions about whether PSE obligations should fully extend to such services. The regulation’s broad scope covers nearly all online services, creating uncertainty for companies that are not traditional content hosts.

In 2022, Indonesian authorities blocked over 213,000 web pages to enforce PSE compliance, including temporary restrictions on platforms such as PayPal. Observers note that enforcement against an infrastructure provider could have wider repercussions, potentially affecting multiple services simultaneously.

Foreign PSEs Seek Support

While domestic operators dominate Indonesia’s digital market, 6,604 registered by mid-2022, foreign firms lag behind, with only 125 registrations completed.

Many of these foreign platforms are new to Indonesia’s Online Single Submission Risk-Based Approach (OSS-RBA), a process requiring detailed documentation, system disclosures, and appointment of a local representative.

To navigate these complex requirements, foreign companies often rely on specialized business-to-business compliance services. These providers manage the full registration process, including translations, local representation, and ongoing compliance checks. Komdigi’s official portal, pse.kominfo.go.id, lists registered operators and provides guidance for companies seeking to meet local regulations.

Implications for Indonesia’s Digital Economy

Indonesia’s digital economy is projected to exceed $130 billion by 2025, attracting more foreign platforms that must adhere to PSE registration rules. The government’s outreach and enforcement initiatives, particularly following the July 2022 registration deadline, signal a serious intent to regulate online operators comprehensively.

For Cloudflare and similar infrastructure providers, this creates a delicate balancing act. While the company seeks to cooperate with regulators and ensure smooth operations for its users, the ambiguities in the law underscore the challenges of operating in a market where regulatory expectations are still evolving.

The outcome of these discussions will likely influence how Indonesia’s PSE framework is interpreted and enforced against non-content-hosting services, shaping the country’s digital landscape for years to come.

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