Indonesia suspends Worldcoin’s biometric data collection, citing violations of 2022 privacy laws and unauthorized use of local partner credentials, amid regional regulatory tightening.
Indonesian authorities ordered an immediate halt to Worldcoin’s operations on 18 October 2023 after discovering unregistered biometric data collection devices using credentials from ride-hailing subsidiary Gojek, escalating concerns about foreign tech compliance with new privacy laws.
Enforcement Action Details
Indonesia’s Ministry of Communications and Informatics blocked Worldcoin’s physical operations and digital infrastructure Thursday, alleging three violations:
- Failure to register under 2022’s Personal Data Protection (PDP) Law
- Unauthorized use of PT Aplikasi Karya Anak Bangsa’s business license
- Collection of iris scans without proper informed consent mechanisms
Regulatory Context
The crackdown follows Meta’s $7.8 million settlement on 12 October for improper data handling. Ministry spokesperson Semuel Pangerapan stated: ‘Foreign tech firms must comply with PDP requirements for local data storage and processing oversight – no exceptions.’
Technical Violations
Audits revealed Worldcoin deployed 78 biometric kiosks using Gojek’s transportation service permits rather than required data processor certifications. SAFEnet’s October report found 92% of users surveyed didn’t understand data usage terms.
Regional Implications
Thailand suspended similar trials on 20 October, while Malaysia announced new biometric guidelines taking effect 1 November. Worldcoin’s parent company Tools for Humanity saw shares drop 9% in secondary trading on 19 October.
Expert Reactions
Digital Rights advocate Nur Fitri: ‘This isn’t about anti-innovation – it’s about preventing the Aadhaar data leak scenario India faced in 2021.’ MIT researcher Dr. Chen projects compliance costs could erase 35% of Worldcoin’s projected 2024 emerging market revenue.
Future Outlook
Worldcoin has 14 days to appeal while services remain suspended. The Communications Ministry confirms draft legislation requiring foreign tech firms to establish local data centers by Q2 2024, mirroring Vietnam’s 2023 cloud storage mandates.
Historical Precedents
Indonesia’s action continues a pattern of Global South nations reasserting digital sovereignty. India’s Aadhaar system faced Supreme Court challenges in 2018 over privacy concerns, leading to strict data localization rules. Kenya abandoned its Huduma Namba biometric ID program in 2022 after constitutional challenges.
Market Context
The biometric tech sector, projected to reach $76 billion by 2032, faces growing pains. Frost & Sullivan data shows regulatory delays added 18-24 months to deployment timelines across Southeast Asia since 2021. Worldcoin’s suspension follows Argentina’s 2022 blockchain ID system overhaul, suggesting governments prioritize control over innovation speed.
