INDONESIA Law and Practice Contributed by: Agus Ahadi Deradjat (Agung), Gustaaf Reerink, Adri Dharma, Karina Widyaputri and Ilma Sulistyani, ABNR Counsellors at Law
The administrative sanctions under the ICL and Gov - ernment Regulation No 44 of 2021 on Prohibition of Monopolistic Practices and Unfair Business Competi - tion (“GR No 44/2021”) include: • a decision to cancel an agreement; • an order to discontinue vertical integration; • an order to discontinue behaviour that causes unfair business competition or harms the public; • an order to discontinue abuse of dominant posi - tion; • a decision to cancel a merger or consolidation of undertakings and shares acquisition; • a decision to order payment of damages; and/or • a decision to impose a fine of at least IDR1 billion (approximately USD60,932), by taking account of the fine amount under the government regulation. GR No 44/2021 and KPPU Regulation No 2 of 2021 on Guidelines for Imposing Administrative Fines further stipulate that the KPPU can impose a base penalty of IDR1 billion (approximately USD58,000), plus an additional specified amount. The final calculation of fines is subject to the following limits: • up to 50% of the net profits earned by the under - taking in the relevant market during the violation; or • up to 10% of the total sales in the relevant market during the violation. The amount of the fine is calculated based on: • the negative impact caused by the violation; • the duration of the violation; • mitigating factors; • aggravating factors; and • the ability of the undertaking to pay. Cartel conduct taking place outside Indonesian juris - diction may still fall within the scope of the prohibition of the ICL if one or more of the undertakings involved are domiciled in Indonesia or are directly or indirectly conducting business in Indonesia. Indirect business activities include those carried out by an undertaking’s Indonesian subsidiary, which, according to the Single Economic Entity doctrine established in the Temasek case, is considered part of the same economic entity as its parent company.
The existing ICL does not contain provisions for a leni - ency programme. 6.4 Abuse of Dominant Position Article 25 of the ICL specifically defines abuse of a dominant position. Undertakings are prohibited from taking advantage of their dominant position, either directly or indirectly, to: • impose trade terms with the intention to prevent or hamper consumers from acquiring competitive goods or services, on price or quality; • restrict the market and technological development; or • hamper other undertakings, with the potential to become competitors, from entering the relevant market. Under Article 25 (2) of the ICL, there is dominance if: • one undertaking controls 50% or more of the mar - ket share for one type of product or service; or • two or three undertakings or groups of undertak - ings control 75% or more of the market share for one type of product or service. The above provision should be read in conjunction with Article 1 (4) of the ICL, which defines “dominant position” as a situation in which an undertaking has no meaningful competitors in the relevant market in view of the market share that it holds, or the undertaking holds a higher position among competitors in the rel - evant market in view of financial capability, the ability to access supplies and sales, and the ability to adjust offer and demand of certain products and services. Article 25 constitutes a “per se” prohibition, mean - ing that once the required elements are fulfilled, the KPPU can conclude that a violation has been legally and convincingly proven. Nonetheless, in practice, the KPPU frequently strengthens its findings by assessing and demonstrating the impact of the abuse to sub - stantiate the evidence and justify the imposition of sanctions. While Article 25 outlines specific forms of abuse, other types of abusive conduct may still fall under different provisions of the ICL. Undertakings that engage in
481 CHAMBERS.COM
Powered by FlippingBook