INDONESIA LAW AND PRACTICE Contributed by: Agus Ahadi Deradjat (Agung), Gustaaf Reerink, Adri Dharma, Karina Widyaputri and Ilma Sulistyani, ABNR Counsellors at Law
While certain provisions impose a “per se” or ”hardcore” cartel prohibition – such as those relating to price fixing and group boycotts – most are assessed using a “rule of reason” approach. Under this approach, sanctions may only be imposed if it can be proven that the restrictive agreement potentially causes adverse effects on the market resulting in monopolistic practices and/or unfair business competition. Under the ICL, prohibited conduct or agree - ments are punishable by both administrative and criminal sanctions. However, only the refusal to co-operate with a KPPU investigation or failure to disclose significant information for such an investigation is subject to criminal sanctions. These criminal sanctions include a maximum fine of IDR5 billion (approximately USD304,662) or imprisonment of up to one year (if the fine is not paid). Other prohibited conducts and agree - ments are subject solely to administrative sanc - tions. The administrative sanctions under the ICL and Government Regulation No 44 of 2021 on Prohi - bition of Monopolistic Practices and Unfair Busi - ness Competition (“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 position; • a decision to cancel a merger or consolida - tion 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 govern - ment regulation. GR No 44/2021 and KPPU Regulation No 2 of 2021 on Guidelines for Imposing Administra - tive Fines further stipulate that the KPPU can impose a base penalty of IDR1 billion (approxi - mately USD60,932), 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 undertaking 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 jurisdiction may still fall within the scope of the prohibition of the ICL if one or more of the under - takings 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 Indone - sian 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 leniency programme.
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