Global social networking service Facebook agreed to open a permanent establishment in Indonesia this month to comply with the regulations, a senior official said on Wednesday (02/08).
“Opening an office will put [Facebook] closer to its users and [offer] faster services,” director general for applied informatics at the Ministry of Communications and Information Technology, Semuel A. Pangerapan said, as quoted by Antaranews.com.
According to Semuel, Facebook will set up a limited liability company — known locally as perseroan terbatas — this month.
Indonesia has been demanding that tech giants such as Facebook and Google set up permanent entities in the country. The government requires them to book in their local branches all income made in Indonesia for tax compliance purposes.
Semuel’s comments come after Minister of Communications and Information Technology Rudiantara’s meeting with Jeff Wu, Facebook Asia Pacific trust and safety director, at the Grand Hyatt Hotel in Jakarta on the same day.
During the meeting, the minister asked Facebook to follow the new Standard Industrial Classification — known as KBLI — that categorizes all businesses for the sake of economic analysis, decision-making and policy-making.
Since the previous KBLI did not recognize digital businesses, Facebook received a license as a management consulting company. It now needs to be classified as a commercial portal or web platform.
Semuel said that during the meeting discussed were also Facebook’s efforts to handle illegal content, like child pornography, terrorist propaganda and hoax news, by using geo-blocking, which restricts access to internet content based on a user’s IP address.
“Facebook will create a special algorithm for Indonesia. Hoax-handling is contextual. What we can do is to have a monitoring team to offer inputs to determine which content is illegal,” he said.