The Failure of Indonesian E-commerce Law in Adapting to Digital Economy

Abstract

E-commerce and social media have become the main platforms for trade in Indonesia, but the legal framework governing digital transactions remains ambiguous and inadequate. Therefore, this research aimed to examine the causes of weak e-commerce regulation, the developing legal issues, and the implications for the sustainability of conventional trade. Behavioral data related to digital trading practices were analyzed across several e-commerce platforms using an empirical legal method. Muhammad al-Tahir Ibn Ashur’s theory of maqāsid al-sharia was applied, comprising al-maqāsid al-ʿammah (general objectives) and al-maqāsid al-khassah (specific objectives)to interpret the dynamics of e-commerce usage, the relationships among parties, and the legal challenges arising in online transactions. The results showed that the existing legal framework failed to keep pace with the complexity of e-commerce, leading to insufficient legal certainty, justice, and protection for all parties. Theoretically, this research extended Ibn Ashur’s maqāsid al-sharia from moral and social domains to digital legal sphere, offering a new paradigm for understanding legal behavior in cyberspace. A conceptual foundation was provided from a practical context for reforming e-commerce regulation, emphasizing the need for a maqāsid al-sharia-based legal design to uphold justice, public welfare, and the protection of consumer and business rights.