Copyright Law Revision Potentially Contradicts the RI-US Trade Agreement and Hinders AI

Director of Digital, Technology, and Trade Policy at Crowell Global Advisors and Non-Resident Fellow at the National Bureau of Asian Research, Nigel Cory VOI)

JAKARTA - The proposed revision of the Copyright Law is considered potentially in conflict with Indonesia's digital trade commitments in the Agreement on Reciprocal Trade (ART) with the United States and can hinder the development of artificial intelligence (AI) and the national digital economy.

Director of Digital, Technology, and Trade Policy at Crowell Global Advisors and Non-Resident Fellow at the National Bureau of Asian Research, Nigel Cory, said that a number of provisions in the draft revision of the Copyright Law risked creating legal uncertainty, increasing the potential for trade disputes, and reducing the attractiveness of investment in the technology sector.

"Indonesia has a great opportunity to become one of the leaders of the digital economy in Southeast Asia. However, copyright regulations that burden digital platforms and AI developers have the potential to reduce investment, slow down innovation, and create new tensions in trade relations with the United States," said Nigel Cory in his statement, Wednesday, July 22.

Indonesia signed the ART with the United States on February 19, 2026 as part of efforts to strengthen trade relations between the two countries. Although the agreement has not yet come into force because it is still undergoing legal proceedings in the United States, both countries have expressed their commitment to continue its implementation.

Nigel assessed that a number of provisions in the draft revision of the Copyright Law had the potential to be inconsistent with this commitment. One of them is contained in Articles 29 and 30 which require digital platforms to pay compensation to media organizations through collective management institutions for indexing, summarizing, embedding links, to the use of journalistic works for AI training.

According to him, the scheme has never been implemented in any country and has the potential to be in conflict with ART which prohibits obligations for US digital service providers to fund domestic media organizations through paid licensing or profit-sharing mechanisms.

In addition to the substance of the rules, Nigel also highlighted the process of drafting regulations. He assessed that the public consultation period which only lasted for four days through a WhatsApp notification was inadequate to discuss regulations that had a wide impact on the copyright sector, media, search engines, digital platforms, and AI development.

"Regulations with this impact require open, transparent public consultations and provide sufficient time for all stakeholders to provide input. This process is also part of Indonesia's commitment to international trade agreements," he said.

Nigel also criticized the provision that gives regulators the authority to close access to digital platforms if certain violations occur, including delays in payments to collective management institutions and non-compliance with content labeling obligations.

According to him, this approach has the potential to create legal uncertainty for digital business actors. He reminded the experience in 2022 when a number of international digital platforms were blocked due to delays in registration as Electronic System Operators (PSE), before the policy was eventually revised.

Furthermore, Nigel assessed that the impact of the rules would not only be felt by foreign technology companies. Because the provisions apply to "everyone", AI developers, start-ups, and domestic technology industry players will also face payment obligations, labeling requirements, and the same risk of sanctions.

He also highlighted the *fair use* provision in Article 66 which only provides an exception for AI training for non-commercial purposes. This restriction is considered to hinder the development of AI models by Indonesian companies and researchers.

However, Nigel appreciates a number of objectives in the draft revision of the Copyright Law, such as protecting the public from the misuse of digital replicas and encouraging the use of technologies such as watermarks and cryptographic metadata to distinguish original content from synthetic content.

"Protection of creators and the public is an important goal. However, copyright law should not be an instrument to regulate all challenges arising from the development of digital economy and AI," he said.

As a recommendation, Nigel encouraged the government to postpone discussion of the Copyright Law revision, conduct a thorough impact study, and open a wider public consultation. He also proposed that the mandatory payment scheme from digital platforms to media companies be reviewed and replaced with an *opt-out* based text and data mining (TDM) mechanism so that it still provides protection to copyright holders while supporting the development of national AI.

"Indonesia does not need to choose between protecting the rights of creators and building a competitive digital economy. Both goals can be achieved simultaneously through transparent, proportionate regulations, supporting innovation, and in line with international trade commitments that have been agreed upon," concluded Nigel Cory.