Jakarta. A growing number of restaurants, cafés, and other businesses have stopped playing Indonesian music altogether to avoid paying royalties, as the government steps up enforcement of copyright laws in the wake of a high-profile case involving the Mie Gacoan restaurant chain.

The government is urging restaurant, hotel, café, and shopping mall owners to comply with music copyright rules, which have been in place since 2021 under Government Regulation No. 56. However, enforcement had been relatively lax until recently.

I Gusti Ayu Sasih Ira, director of Mitra Bali Sukses, the company operating Mie Gacoan outlets in Bali, has been named a suspect for copyright infringement. Authorities allege the restaurants routinely played popular songs without paying royalties through proper licensing channels.

The investigation was launched following a complaint filed in August by the Indonesian Music License Center (Sentra Lisensi Musik Indonesia, or Selmi), which alleged that Mie Gacoan failed to obtain commercial music licenses. Bali police estimate the resulting financial loss could amount to billions of rupiah.

Law and Human Rights Minister Supratman Andi Agtas stressed the importance of respecting intellectual property, reminding businesses that playing music in a commercial space constitutes a business activity that requires royalty payments. “The most important thing is learning to respect other people’s rights,” Supratman said on Monday. 

Although royalty collections have grown substantially, from just Rp 400 million ($24,400) in the early years of the law to Rp 200 billion today, many musicians still receive only modest amounts, some as little as Rp 60,000 per year.

Supratman encouraged small and micro enterprises to negotiate royalty rates with the National Collective Management Organization (LMKN). “If you can’t afford it yet, talk to LMKN. We already have the legal framework in place,” he said.

The House of Representatives has also called for reforms. Deputy Speaker Sufmi Dasco Ahmad acknowledged the challenges and said lawmakers are working to revise the 2014 Copyright Law to enable fairer implementation.

Musicians have also joined the conversation. Veteran rocker Ikang Fawzi defended the royalty system, saying, “Using someone’s creative work should come with respect and payment.” Still, he admitted the system needs improvement to ensure fairness across the industry.

GIGI frontman Armand Maulana echoed these concerns during a Ministry of Law podcast titled What’s Up on July 11. “In the past, royalties were just a bonus. There was no clear system,” Armand said. “Now we have regulations, but implementation is still lacking. With technology like blockchain, we could achieve true transparency.”

He highlighted the role of LMKN, which currently takes a 20 percent cut from collected royalties. Armand urged the government to directly fund the agency. “We have massive potential if the system is managed properly,” he said.

In Yogyakarta, the local office of the Ministry of Law has warned business owners not to play unlicensed music from personal devices or unauthorized streaming services. Officials reiterated that playing music in commercial venues qualifies as a public performance and must be licensed accordingly.

Under Government Regulation No. 56/2021, businesses that use music commercially --such as restaurants, cafés, and hotels-- must:

• Obtain a usage license,

• Pay royalties via LMKN, and

• Use a blanket license covering all registered songs.

Royalty rates are determined based on seating capacity, operating hours, and location to ensure proportional and fair fees.

Key provisions of the regulation include:

• Article 3: Requires royalty payments for public commercial use of music.

• Article 6: Mandates LMKN to use a centralized music database.

• Article 11: Grants reduced rates for micro businesses.

• Article 14: Distributes royalties among rights holders, LMKN operations, and a reserve fund.

• Article 15: States that unclaimed royalties are held for two years before being moved to the reserve fund.

LMKN is also required to build an integrated online licensing system and undergo annual audits.