E-Commerce Consumer Protection: Limits on Digital Platforms’ Liability for the Distribution of Illegal Goods and Transaction Fraud

Abstract

The exponential growth of e-commerce in Indonesia and globally has repositioned digital marketplaces from passive intermediaries into central actors in consumer transactions, yet the legal boundaries of their liability for illegal goods and transaction fraud remain unsettled. This article examines the scope and limits of digital platform liability under Indonesian consumer protection law, compared with emerging international frameworks such as the European Union’s Digital Services Act and the revised Product Liability Directive. Employing a normative juridical method with statutory, conceptual, and comparative approaches, the study analyzes Law Number 8 of 1999 on Consumer Protection, Law Number 11 of 2008 on Electronic Information and Transactions as amended, Government Regulation Number 80 of 2019, and Minister of Trade Regulation Number 31 of 2023, alongside recent scholarship on platform-liability economics and comparative marketplace regulation. The findings show that Indonesian law still relies on an intermediary-immunity paradigm inherited from electronic-transaction regulation, leaving significant protection gaps for consumers harmed by counterfeit goods, undisclosed illegal products, and payment fraud facilitated through verified-seller schemes. The article proposes a graduated liability model combining notice-and-takedown obligations, seller-verification duty of care, and residual platform liability for failure to mitigate known risks — as a more balanced and enforceable standard than either strict liability or blanket immunity.