OECD kpcdb

1. Scope

 

Chapter III of the Law provides for per se prohibition of agreements (no need to demonstrate effects) to:

 

• fix prices to be borne by the consumer/clients in the same relevant market (Article 5);
• price discriminate (Article 6);
• boycott other enterprises from engaging in the same type of business or access to sell or buy goods and services (Article 10); and
• exclusive contracts that restrict resale and supply (Article 15)
• Chapter III also prohibits other agreements when they result in monopolistic practices or unfair business competitions (need to demonstrate effects). Included are:
• agreements to jointly control the production or market (oligopoly) (Article 4)
• agreements between competitors to fix price below the market price (predatory pricing) (Article 7)
• agreements for resale price maintenance (Article 8)
• agreements leading to market partitioning or allocation (Article 9)
• agreements between competitors to influence the price by determining production (cartels) (Article 11)
• agreements to establish a joint company or a large company, by keeping and maintaining the continuity of each respective company or its members, with the aim of controlling the production (trust) (Article 12)
• agreements of jointly controlling the purchase or acquisition of supplies to control prices (oligopsony) (Article 13)
• agreements to control the production of goods included in the production chain (vertical integration) (Article 14)
• agreements with foreign parties setting forth conditions which may cause monopolistic practices or unfair business competition (Article 16).

 

According to Article 5(2), the Law is not applicable to agreements to fix prices in a joint partnership.

 

According to Article 50, agreements or activities excluded from the provisions of the Law include the following:

 

a)  actions and/or agreements aimed at implementing applicable laws and regulations

b)  agreements related to intellectual property rights, such as licenses, patents, trademarks, copyright, industrial product design, integrated electronic circuits, and trade secrets as well as agreements related to franchise

c)  agreements for the stipulation of technical standards of goods and or services which do not restrain, and or do not impede competition

d)  agency agreements which do not stipulate the resupply of goods and or services at a price level lower than the contracted price

e)  co‑operation agreements in the field of research for raising or improving the living standard of society at large

f)   international agreements ratified by the Government of the Republic of Indonesia

g)  export-oriented agreements and or actions not disrupting domestic needs and or supplies

h)  business actors of the small-scale group

i)   activities of co‑operatives with the specific aim of serving their members.

2. Assessment

For those Chapter III agreements prohibited when they result in monopolistic practices or unfair business competitions and where the KPPU needs to demonstrate effects (e.g., market allocation, bid rigging) the KPPU has issued the Guidelines on Cartels (No. 4/2010) that sets out a number of indicators, that include high level of concentration and small number of business actors, homogenous goods, high barriers to entry, amongst others.

3. Remedies and sanctions

Remedies and administrative sanctions: Under Article 47, administrative sanctions may be imposed, such as a fine (see Section I.4), revocation of contracts, order to cease vertical integration and/or compensation for damages.

 

Criminal sanctions: Under Article 48, violations of Articles 4, 9 through 14, and 16 are subject to a criminal fine between IDR 25 billion and IDR 100 billion, or imprisonment up to 6 months. Violations of Articles 5 through 8 are subject to a criminal fine between IDR 5 billion and IDR 25 billion, or imprisonment up to 5 months.

4. Leniency

There is no leniency programme currently.

 

 

* This information is based on Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions (2018).