Advancing Fair Competition Principles in Indonesia AI Economy Through Regulatory Sandbox Governance

DOI

10.2991/978-2-38476-565-2_58How to use a DOI?

Keywords

Artificial Intelligence Economy; Fair Competition Principles; Regulatory Sandbox; Algorithmic Collusion; Digital Economy Indonesia

Abstract

The advancement of artificial intelligence (AI) has redefined Indonesia’s economic landscape, particularly in digital economy sector. These changes introduce not only new opportunities for efficiency and innovation but also emerging risks of algorithmic dominance and unequal market power. As AI-driven business models increasingly rely on control over data, computing infrastructure, and large-scale machine-learning capabilities, competitive advantages become disproportionately concentrated among a small group of dominant digital firms. In response, this research aims to analyze how AI-driven business models undermine fair competition principles in Indonesia and to assess the adequacy of existing legal instruments especially competition law, in addressing emerging forms of AI-enabled anti-competitive conduct. The study finds that Indonesia’s regulatory framework remains insufficient, as current laws do not effectively govern algorithmic pricing, facilitate oversight of tacit collusion, or mitigate exclusionary practices enabled by AI, thereby limiting the enforcement capabilities of institutions such as KPPU. Therefore, it emphasizes the urgent need to establish a hybrid regulatory model, combining traditional legislation with a regulatory sandbox for balancing innovation with market fairness. By enabling supervised AI experimentation and proactive regulatory learning, a sandbox -based model strengthens oversight capacity, mitigates risks of AI-driven monopolistic practices, and advances fair competition in Indonesia’s rapidly expanding AI economy.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Agata Kurniati
AU  - Ningrum Natasya Sirait
AU  - Mahmul Siregar
PY  - 2026
DA  - 2026/04/30
TI  - Advancing Fair Competition Principles in Indonesia AI Economy Through Regulatory Sandbox Governance
BT  - Proceedings of the 2nd International Conference on Social Environment Diversity (ICOSEND 2025)
PB  - Atlantis Press
SP  - 484
EP  - 493
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-565-2_58
DO  - 10.2991/978-2-38476-565-2_58
ID  - Kurniati2026
ER  -