Introduction
On January 15, 2026, the government officially enacted Government Regulation (PP) Number 3 of 2026 concerning the Amendment to Government Regulation Number 29 of 2021 on the Implementation of the Trade Sector. This Government Regulation does not merely update the technical operational provisions for licensing in the trade sector; rather, it introduces a significant shift in business competition, the distribution of goods, and domestic trade administration. This article will dissect the crucial points of this amendment, particularly those directly intersecting with antitrust law enforcement and the operational standards of business entities.
Deregulation of Supermarket Ownership Limits: A New Test for the KPPU (Business Competition Supervisory Commission)
One of the most significant changes in PP 3/2026 is the abolition of the provision limiting the number of supermarket or minimarket outlets owned by retail corporations. Under the previous regulation (Article 98 paragraph (4) of PP 29/2021), retail corporations were restricted in opening independent outlets and were obligated to adopt a franchise system if they exceeded a certain expansion limit.
The elimination of this restriction opens up broader expansion opportunities for retail corporations. However, this condition also has the potential to create new oligopolies, especially in regional markets. Therefore, the Business Competition Supervisory Commission (KPPU) holds a crucial supervisory role in identifying indications of predatory pricing (the practice of selling at a loss to eliminate local grocery stores) or the abuse of a dominant position in the domestic retail market. On the other hand, the government seeks to counterbalance this by introducing Article 98A paragraph (1) of PP 3/2026, stipulating that the government will facilitate the enhancement of domestic product marketing through cooperation with Supermarket business actors possessing a global supply chain. Additionally, in paragraph (2) of the same article, the government encourages these supermarket business actors to open marketing access for domestic products so they may enter their overseas supermarket outlets. This signifies that the government will continue to assert its role under these circumstances.
Increased Restrictions on the Corporate Governance of Direct Selling Businesses
In contrast to the relaxed retail sector, the government through this PP adopts a highly restrictive stance towards the direct selling or Multi-Level Marketing (MLM) industry. Two prohibitions are regulated: the prohibition of Virtual Offices and the prohibition of the sale of services.
Through the addition of Article 51 letter n, direct selling companies are now strictly prohibited from operating using virtual office addresses or co-working space facilities. Business actors are required to possess a permanent physical workspace as a form of accountability to consumers.
This regulation also explicitly prohibits the sale of products in the form of “services” through direct selling distribution schemes. Previously, restrictions merely focused on the prohibition of trading in futures commodity products.
Supply Chain Transparency & Mandatory Warehouse Reporting
In an effort to suppress commodity hoarding practices that could potentially disrupt the stability of market mechanisms, PP 3/2026 sets forth new obligations for goods storers. Business actors storing Staple Goods or Essential Goods are now obligated to submit regular monthly reports on their warehouse administration records (Article 68 paragraph (3)). From a legal compliance perspective, this obligation mandates large-scale manufacturing and distributor companies to revise their warehousing and invoicing Standard Operating Procedures (SOP) in order to comply with these administrative obligations.
Flexibility in Export-Import Trade Administration
In the aspect of cross-border trade, PP 3/2026 decentralizes the authority to determine the types of goods subject to export-import prohibitions or restrictions. The regulation detailing the goods is now delegated from the PP to the Ministerial Regulation level through direct coordination with the Coordinating Ministry for Economic Affairs or the Coordinating Ministry for Food Affairs. Furthermore, the criteria for export restrictions have been expanded by incorporating specific variables regarding domestic supply resilience, global price fluctuations, and ecological impact sustainability criteria.
Conclusion
Government Regulation Number 3 of 2026 is a dual-acting regulatory instrument; it grants aggressive flexibility to the supermarket retail sector and international trade administration policies, yet acts conservatively towards the direct selling business model and warehousing administration. Business actors, as well as legal consulting practitioners, must immediately review their corporate governance documents, ranging from the physical legitimacy of office licensing and warehouse supervision SOPs to reviewing the legal boundaries of retail expansion to avoid intense scrutiny by the KPPU concerning antitrust laws.
For legal consultation assistance or other legal services from SW Counselors at Law, please contact:
Fanny, S.H.
Senior Associate
T. (+6221) 2222-0200
Paulus Sugiarto Budiman, S.H.
Associate
T. (+6221) 2222-0200
E. paulus.budiman@shinewing.id
