Algorithmic Monopoly: New Challenges for Indonesian Business Competition Law Enforcement in the Face of Digital Platform Dominance

Abstract

Background: The digital economy has transformed business competition by positioning algorithms, data, artificial intelligence, and network effects as key sources of market power. This development has enabled algorithmic monopolies, in which digital platforms exert substantial control over market access and interactions, posing challenges to Indonesia’s conventional competition law framework.Objective: This study examines the characteristics of algorithmic monopolies, identifies limitations in dominant-position regulation under Law Number 5 of 1999, compares regulatory approaches in the European Union, the United States, and the OECD, and proposes a reconstructed concept of algorithm-based market dominance for Indonesian competition law.Methods: This normative legal research applies statutory, conceptual, comparative, and case approaches. Legal materials comprising regulations, scholarly literature, policy documents, and digital competition law developments were qualitatively examined using a prescriptive-analytical method.Results: The findings reveal that the existing dominant-position framework inadequately addresses market power derived from algorithms, data control, and network effects, creating a normative gap. Comparative analysis demonstrates more adaptive approaches through the European Union’s Digital Markets Act, modernized U.S. antitrust policies, and OECD algorithmic governance initiatives. Accordingly, this study proposes algorithmic market dominance as an assessment framework encompassing control over data and algorithms, network effects, user dependence, self-preferencing, and digital barriers to entry.Conclusion: This reconstruction provides a conceptual basis for regulatory reform and KPPU enforcement guidelines responsive to digital-market dynamics while strengthening competition, innovation, fairness, legal certainty, and accountability in Indonesia’s digital economy.