Journal
of Social Science
Socialization
of Terms of Use and Privacy Policy on Indonesian e-commerce Websites
1Communication Study Program, Faculty of Economic and
Communication, Bina Nusantara University, Jakarta,
11530, Indonesia
2 Information System Department, School of Information System, Bina Nusantara University, Jakarta, 11530, Indonesia
3Law Study Program, Faculty of Humanities, Bina Nusantara University, Jakarta, 11530, Indonesia
A
R T I C L E I N F O a B S T R A C T
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AIJ use only: Received date : 05 May 2020 Revised date : 20 May 2020 Accepted date : 05 July 2020 Keywords: online privacy e-commerce term of use |
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This article aims to identify common practices in
Indonesian e-commerce regarding terms of use and privacy policies. Website
visit rankings from Alexa and Similarweb were used
to identify the 10 most commonly visited e-commerce sites in Indonesia. Then,
placement, length, and content structure of the terms of service and privacy
policies of these websites were compared. Findings suggest that the
information provided by these documents is sufficient and legally compliant,
although some of the websites appear to disregard their importance. The
actual contents of these documents were not analyzed and are thus open for
further study. The information provided in this article may give merchants
intending to open e-commerce stores in Indonesia some insight into how the
protection of consumers’ personal data leads to better service. This paper
also proposes a simple framework for assessing the extent to which an
e-commerce website successfully ensures that consumers agree and consent to
its terms of use without burdening them with lengthy and obscure legal
documents. |
Introduction*
Indonesia is projected to become the third largest
e-commerce market in Asia by 2020 (Harsono, 2016) . Both independent businesses and mass retailers are enjoying the
growth of this market. Acknowledging this growth, the Indonesian government
established the Electronic Information and Technology Law in 2008 to regulate
it.
At the beginning of the decade, the growth of
e-commerce was slow due to low public
trust regarding transaction security. Most e-commerce sites found that although
they provided various payment methods, the majority of transactions were done
through payment by bank transfer. However, due to the recent explosion in the
ownership of smart phones, this gradually began to change. Some customers
actually shifted to buying daily requirements online to save time while also
taking advantage of slightly lower online prices including promotions and
discounts.
However, the increase in the number of e-commerce
customers does not necessarily imply heightened internet literacy. While
Internet fraud and crime rates related to e-commerce are difficult to obtain,
news of such cases can become viral on social media. Consumers Union has
identified several issues that customers must consider during browsing: (1)
identity; (2) advertising and sponsorship; (3) customer service; (4)
corrections; and (5) privacy (ConsumersUnion, 2016).
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Jsss.co.id 41
Research has revealed that not many customers care about privacy on
websites (Adams, 2003). However, when privacy information is displayed
prominently on a website, it may increase a customer’s willingness to buy from
or trust that website (Adams, 2003). Such privacy information is commonly included in a
privacy policy. Notably, the absence of a privacy policy does not appear to
discourage customers. The second piece of legal information is contained in the
“terms of service,” also called “terms of use” or “disclaimer.” This
information commonly conveys how a service provider expects a customer to use
their website.
Although consumer
education is important in Indonesia, delivery channels are limited. According
to the 2013 Curriculum, the former minister of education deleted ICT as a
special subject, reflecting the opinion that consumer education is best
obtained through the market itself. This research analyzes privacy policies and
terms of use on Indonesian e-commerce websites with the goal of identifying the
best practices available for Indonesian e-commerce websites and improving our
understanding of how we can educate and motivate consumers to follow
recommended protective measures (Tsai, Egelman, Cranor, & Acquisti, 2011).
THEORY
Online Privacy
Online privacy is the aspect of
personal privacy that is related to communication over the Internet. It centers
around the matter of obtaining, using, disclosing, and displaying personal data
such as name, age, or behavior on a website. The concept of privacy involves
space, decision, and information. In terms of space, individuals expect that
their online rights will not be trespassed by others. In terms of decision,
every individual expects to be able to determine the extent of personal space
required. Some may freely disclose their birth date, for example, while others
may not. In terms of information, privacy is meant to safeguard against the
collection of information from various sources.
With the rise of
the Internet in the 1990s and mobile networks in the 2000s, online privacy has
become a major concern. Most Internet users use commonly available tools to
protect their basic privacy. However, some users prefer higher levels of
privacy or even Internet anonymity. They may be particularly careful about what
information they submit in online forms.
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A competition for personal data access is ongoing between the
corporation and the individual. Corporations pay to learn about and understand
individual preferences to direct targeted advertising while some individuals
work hard to divulge minimum personal data to avoid being harvested by
corporations. Although the corporations’ cause may be purely commercial, some
parties use the same information for malicious acts such as spyware and
malware. A major concern is Internet use by children and adolescents who do not
particularly understand the risks involved in terms of their privacy.
Indonesia does
not have a specific law regarding protection of personal data; rather, the
relevant laws are scattered among various acts such as Law No. 7 of 1971
concerning Main Provisions of Archives, Law No. 8 of 1997 concerning Company
Documents, Law No. 7 of 1992 concerning Banking as Amended by Law No. 10 of
1998, Law No. 36 of 2009 concerning Health, Law No. 36 of 1999 concerning
Telecommunications and Law No. 23 of 2006 concerning Population Administration.
Law No. 11 of
2008 concerning Information and Electronic Transactions does not specifically
regulate personal data but does contain some clauses that may be applied to
cases of infringement. Article 26 of this Law regulates the use of personal
data in electronic media only by consent of the owners. Illegal access to
systems that may contain personal data is regulated in Article 30.
Government Regulations 82 of 2012, an implementing regulation for Law No. 11 of 2008, contains a minimal definition of personal data. Article 15 of the Act also regulates the responsibilities of providers to inform individuals in case of system failure, although no specific definition of failure is provided.
Term of Use
Terms of use,
also known as terms of service, user agreements, or merely disclaimers, are
commonly provided by content providers to regulate the use of their content by visiting users. A
user is expected to abide by the set regulations when using the concerned
website. Although various types of presentations are available, not all terms
of use can be used effectively in court proceedings.
Three general
types of terms of use exist. The first is clickwrap, in which the user must
click a button to signify agreement with the terms. This type is almost always
defensible in court due to the agreement made by the user; it complies with the
mutual assent principle of agreements in Indonesian law. However, there is a
loophole as persons who are of age and are capable have to consent to these agreements.
This situation may be handled by inserting clauses that allow only persons of
age to agree to the terms.
The second type
is browsewrap, in which users do not have to click on
anything. Rather, the service provider presumes that users automatically agree
to their terms when they browse the relevant website. Such an agreement is not
always admissible in court due to the mutual assent principle. A link to the
terms or the terms themselves must be displayed prominently on the home page or
navigation bar at the point where the user commonly enters the site for the
terms to be admissible in court. A famous case is that of Zappos (Milne, Rohm, & Bahl, 2004).
The third and
last type includes all other methods of displaying terms of use, none of which
are admissible in court due to their incompatibility with agreement terms in
Indonesian Civil Code.
Terms of use are mostly critical in situations where in content use or misuse could be detrimental to the concerned service or to society in general. Since Act 11 of 2008, a content provider can be held responsible for the content hosted on their sites. This is dangerous especially for websites that display content provided by the users. It is not cost-effective to monitor all submissions to the system. A common alternative to this is providing complaint centers where a visiting user may report a page or an entire site if it infringes their interests, that is, copyright. The service provider may then retract the content for a certain amount of time, thus allowing dispute resolution to proceed.
Privacy Policies
A privacy policy
is defined as a legal statement that discloses to clients how a service
provider collects, stores, releases, and uses their personal data. Although exact contents may vary in
different jurisdictions according to applicable laws and regulations, various
general guidelines have been created.
Journal of Social Science |
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The Organization for Economic Co-operation and Development (OECD) held
the Convention for the Protection of Individuals with regard to Automatic
Processing of Personal Data (Convention 108) in 1981. This Convention provides
guidelines for setting national regulations. Sweden, West Germany, France, and
the United States created their own national laws in response. The OECD also
issued the Recommendations of the Council Concerning Guidelines Governing the
Protection of Privacy and Trans-Border Flows of Personal Data. The seven
principles governing the recommendations were as follows:
- Notice—data subjects should be given notice when their data is being
collected;
- Purpose—data should only be used for the purpose stated and not for any other
purposes;
- Consent—data should not be disclosed without the data subject’s consent;
- Security—collected data should be kept secure from any potential abuses;
- Disclosure—data subjects should be informed as to who is collecting their data;
- Access—data subjects should be allowed to access their data and make
corrections to any inaccurate data; and
-
Accountability—data
subjects should have a method available to them to hold data collectors
accountable for not following the above principles.
Method
Data Collection
We
identified the top 10 ranked e-commerce websites in Indonesia from two free
data providers, Alexa and SimilarWeb. The websites
are listed in Table 1.
Table
1: Indonesian e-commerce Website Rankings in Alexa and SimilarWeb
|
Alexa Rank* |
SimilarWeb Rank** |
Website |
Type |
|
9 |
9 |
tokopedia.com |
marketplace |
|
13 |
18 |
bukalapak.com |
marketplace |
|
17 |
11 |
lazada.co.id |
retail & marketplace |
|
21 |
19 |
elevenia.co.id |
retail & marketplace |
|
43 |
23 |
blibli.com |
retail & marketplace |
|
62 |
N/A*** |
alfacart.com |
retail & marketplace |
|
126 |
N/A*** |
blanja.com |
retail & marketplace |
|
130 |
N/A*** |
shopee.co.id |
retail & marketplace |
|
141 |
N/A*** |
bhinneka.com |
retail & marketplace |
|
172 |
N/A*** |
mataharimall.com |
retail & marketplace |
* Data
from Alexa was collected on November 14, 2016 from
http://www.alexa.com/topsites/countries/ ID
** Data
from SimilarWeb was collected on November 14, 2016
from https://www.similarweb.com/top-websites/indonesia
*** SimilarWeb free
access only provides data on the top 50 ranked sites.
Data Analysis
We obtained terms
of use and privacy policy documents from these websites where applicable. If
these documents were unavailable, we obtained similar documents having the same
function.
We analyzed the
texts contained in the obtained documents. Sections are categorized and
compared with other documents of the same type.
Summarization
Results of the
data analysis are discussed and summarized. The data are compared to common
best practices to measure compliance. We discuss three points, namely, (1)
document availability; (2) whether the links to the documents are prominently
displayed; and (3) document length.
results
and discussion
Data
Analysis
We obtained the
terms of use and privacy policies from the same websites listed in Table 1.These are listed in Table 2.
Table
2: Term of Use and Privacy Policies on Indonesia e-commerce
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Ease of access and availability.
Terms and
conditions are statements that regulate how a visitor uses a site.
Consequently, the link to these documents should be prominently displayed.
Although all the above mentioned websites have such
links on the homepage, all the links are located at the bottom of the webpage.
Two sites, such as elevenia and alfacart,
do not have separate privacy policies. Instead the privacy policies are
incorporated into the terms and conditions.
Six out of ten
websites do not allow guest buyers (anonymous customers), and all these six
require customers to agree to the terms and conditions by ticking a box during
new customer registration. Although the remaining four websites allow one-time
buying, bhinneka and lazada
require customers to agree to the terms and conditions,whereas alfacart
and shopee do not. Most consumers do not read any
legal documents let alone lengthy ones (Subekti, 2014). Bhinneka.com has the shortest terms and conditions
and privacy policy while lazada and shopee have the longest.
Cookies
and notifications.
Three sites ask for the consumer’s permission to allow notifications. This is a nice feature as they do not automatically use cookies without consent.
Data
Scoring
|
No |
Website |
Location |
Show notif |
Guest buyer |
Terms of Use |
ToU Length |
Privacy Policy |
PP Length |
|
1 |
tokopedia.com |
bottom-middle |
Yes |
No |
Yes |
5624 |
Yes |
1421 |
|
2 |
bukalapak.com |
bottom-middle |
Yes |
Yes |
Yes |
2981 |
Yes |
182 |
|
3 |
lazada.co.id |
bottom-middle |
No |
Yes |
Yes |
9642 |
Yes |
1955 |
|
4 |
elevenia.co.id |
bottom-middle |
No |
No |
Yes |
4879 |
ToU* |
N/A |
|
5 |
blibli.com |
bottom-middle |
No |
No |
Yes |
3204 |
Yes |
704 |
|
6 |
alfacart.com |
bottom-left |
No |
No |
Yes |
3614 |
ToU* |
N/A |
|
7 |
blanja.com |
bottom-middle |
No |
No |
Yes |
2838 |
Yes |
2309 |
|
8 |
shopee.co.id |
bottom-right |
Yes |
Yes |
Yes |
7811 |
Yes |
4876 |
|
9 |
bhinneka.com |
bottom-middle |
No |
Yes |
Yes |
1474 |
Yes |
574 |
|
10 |
mataharimall.com |
bottom-middle |
No |
No |
Yes |
6279 |
Yes |
580 |
We scored each of the five variables from 1
to 10 and then generated a combined score for each website. The highest score
indicates the website that is most successfully geared toward privacy and yet
does not confuse consumers with lengthy legal documents. The full score list is
shown in Table 3.
|
Site |
Show notif |
X1 |
Guest buy |
X2 |
ToU |
X3 |
ToU-WC |
X4 |
PP |
PP-WC |
X5 |
ΣX |
|
tokopedia.com |
Yes |
10 |
No |
5 |
Yes |
10 |
5624 |
4.4 |
Yes |
1421 |
8.6 |
38 |
|
bukalapak.com |
Yes |
10 |
Yes |
10 |
Yes/But |
1 |
2981 |
7 |
Yes |
182 |
9.8 |
37.8 |
|
lazada.co.id |
No |
5 |
Yes |
10 |
Yes |
10 |
9642 |
0.4 |
Yes |
1955 |
8 |
33.4 |
|
elevenia.co.id |
No |
5 |
No |
5 |
Yes |
10 |
4879 |
5.1 |
ToU |
*** |
10 |
35.1 |
|
blibli.com |
No |
5 |
No |
5 |
Yes |
10 |
3204 |
6.8 |
Yes |
704 |
9.3 |
36.1 |
|
alfacart.com |
No |
5 |
No |
5 |
Yes |
10 |
3614 |
6.4 |
ToU |
*** |
10 |
36.4 |
|
blanja.com |
No |
5 |
No |
5 |
Yes |
10 |
2838 |
7.2 |
Yes |
2309 |
7.7 |
34.9 |
|
shopee.co.id |
Yes |
10 |
Yes |
10 |
Yes/But |
1 |
7811 |
2.2 |
Yes |
4876 |
5.1 |
28.3 |
|
bhinneka.com |
No |
5 |
Yes |
10 |
Yes |
10 |
1474 |
8.5 |
Yes |
574 |
9.4 |
42.9 |
|
mataharimall.com |
No |
5 |
No |
5 |
Yes |
10 |
6279 |
3.7 |
Yes |
580 |
9.4 |
33.1 |
Table 3: Scoring of Indonesian Ecommerce Websites
conclusion
A simple analysis of Indonesian
e-commerce websites indicated that bhinneka.com is the best e-commerce website
in terms of privacy concerns. It allows guest buying in which the user does not
have to store his or her data. Furthermore, it also takes precautions by
forcing the user to accept their terms and conditions when buying from the
website.
Bhinneka.com also has the
shortest terms and conditions and privacy policy, thus enabling consumers to
read them in only a few minutes. While lengthy legal documents may seem
necessary, the use of common language enables consumers to understand these
documents easily.
This paper introduces a simple
framework for measuring the extent to which an e-commerce website successfully
ensures that consumers agree and consent to its terms of use without burdening
the consumer with lengthy and obscure legal documents.
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