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In recent years, Indonesia has been experiencing a massive expansion in its e-commerce sector. This is possible due to the increase of internet usage in the country, which enables the high utilization of the internet in buying everyday goods and services. E-commerce allows its users to conduct transactions from the comfort of their own homes, with the process of buying and selling products online being as simple as it can be. Hence, it is not surprising that there has been a peaking number of e-commerce platforms and users in the country, as people rely more on online platforms to fulfill their daily needs due to the Covid-19 pandemic. Other than e-commerce, there is also an interest surrounding the usage of social media in selling and buying goods online – also known as social commerce. Social commerce is not necessarily a new phenomenon, as it is similar to previous practices of commercial transactions via online platforms (Primawan, 2022). However, the inclusion of social media such as instant messaging features, now adds to the attractiveness of social commerce as the preferred online platform to sell or buy products. Despite its numerous benefits, it is without its risks too. One of the main concerns has been the use of algorithms to assist online buying and selling of products, and its subsequent risks for consumers.
This paper studies algorithmic decision making (ADM) and profiling by e-commerce and social media platforms in Indonesia and its risks for the platforms’ consumers. This will be done through the analysis of regulations related to the ADM systems, the explanation of the ADM systems’ practices in Indonesia through multi-stakeholders perspectives, international experiences regarding ADM systems, and challenges that arise from the ADM systems on e-commerce and social media platforms. The explanation and definition regarding ADM, profiling and targeted advertising will be also provided in the upcoming chapters. The study will be concluded by recommendations that will be addressed to relevant stakeholders regarding this matter.
In this study, we find that ADM can be beneficial and presents many opportunities for companies to improve both their user experience and expand the platforms’ services. However, it also comprises threats and challenges if the technology is not used wisely. In addition to that, it also require a comprehensive and firm regulation to guide the utilization.
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