Member Article

Over the course of a few months spanning June to September 2011, a number of regulations were issued by the Business Competition Supervisory Commission (Komisi Pengawas Persaingan Usaha – “KPPU”) as implementing guidelines to several pertinent Articles in Law No. 5 of 1999 concerning Prohibition of Monopolistic Practices and Unfair Business Competition (“Anti-Monopoly Law”).

These guidelines are:

• Guidelines for Monopolistic Practices (Regulation No. 11 of 2011, implementing Article 17 of the Anti-Monopoly Law), which elaborates on the grounds for how a monopoly is established as a result of a business actor’s specific conditions or due to regulations. It is stated that the KPPU adopts a “rule of reason” to prove monopolistic practices using a certain set of standards. In force since 28 September 2011.

• Guidelines for Completing Mergers, Consolidations, or Acquisitions (Regulation No. 10 of 2011 amending Regulation No. 13 of 2010). This Regulation uses a specific term to describe each type of corporate restructuring (i.e, Mergers, Consolidations, or Acquisitions), as opposed to the previous regulation which categorized them all under the general term “merger”. A new reporting procedure is also introduced that was not regulated under the previous Regulation. The Regulation has been in force since 21 September 2011.
• Guidelines for Small-Scale Enterprises (Regulation No. 9 of 2011, implementing Article 50(h) of the Anti-Monopoly Law), in force since 23 August 2011.
• Guidelines for Resale Price Fixing (Regulation No. 8 of 2011, implementing article 8 of the Anti-Monopoly Law). These Guidelines emphasize that minimum resale price fixing is prohibited, and may occur when a manufacturer or supplier determines the minimum resale price for reselling a product, or where the retailer is prohibited from selling a product below the minimum determined price. It also provides case studies in order to help affected parties understand the concepts thoroughly. The Regulation has been in force since 23 August 2011.
• Guidelines on Share Ownership (Regulation No. 7 of 2011, implementing Article 27 of the Anti-Monopoly Law), which elaborates what constitutes a dominant position in respect of market share. It also emphasizes the way the business actor exercises its rights related to management of the company, including voting rights, distributions of dividends, and nominating directors and/or commissioners. The Regulation has been in force since 12 August 2011.
• Guidelines on Predatory Pricing (Regulation No. 6 of 2011, implementing Article 20 of the Anti-Monopoly Law), which provides a clear understanding of what constitutes predatory pricing and aims to prevent interpretations that are too broad. In force since 12 August 2011.
• Guidelines for Exclusive Agreements (Regulation No. 5 of 2011, implementing Article 15 of the Anti-Monopoly Law), in force since 7 July 2011. Provides case examples of an exclusive dealing agreement, tying agreement, tying agreements associated with a discount, and exclusive dealings associated with a discount.
• Guidelines for Price Fixing (Regulation No. 4 of 2011, implementing Article 5 of the Anti-Monopoly Law), in force since 7 July 2011.
• Guidelines for Discriminatory Practices (Regulation No. 3 of 2011, implementing Article 19(D) of the Anti-Monopoly Law), in force since 7 June 2011. Provides more elaboration on the definition of “monopolistic practices” and “discriminatory practices”. Criminal sanctions of up to IDR 25 billion can be imposed for breaches.

 

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