INDONESIA Law and Practice Contributed by: Chandrawati Dewi, Gustaaf Reerink and Bilal Anwari, ABNR Counsellors at Law
In cases where parties’ activities overlap, there is no de minimis level below which competitive concerns are automatically deemed unlikely. 4.3 Reliance on Case Law The notifying party may submit other jurisdic - tion filings that contain case law or market definition for the KPPU’s consideration in per - forming its review. In the authors’ experience, the KPPU also allows the parties to submit an economic analysis based on market definitions used by competition authorities in other jurisdic - tions where the transaction was also notified. However, it is not entirely clear how the KPPU arrives at certain market definitions, as this is not explained in the current format of opinions. 4.4 Competition Concerns The KPPU will assess the following competition concerns (ie, entry barriers and potential for anti- competitive behaviour). Entry Barriers If the market concentration test is positive, the KPPU will assess entry barriers. This assess - ment normally includes factors such as the ease of entry for new market players, the strength of new entrants, the time required to enter the mar- ket, switching costs, the similarity of products, and brand loyalty. Potential for Anti-Competitive Behaviour In addition to entry barriers, the KPPU will evalu - ate the potential for anti-competitive behaviour by the relevant parties. This includes examining potential unilateral effects, co-ordinated effects, and market foreclosure. 4.5 Economic Efficiencies The KPPU takes economic efficiencies into account. It will evaluate a transaction more favourably if it offers potential efficiency benefits
to customers. These efficiency gains should be balanced against any anti-competitive effects of the transaction. The KPPU will prioritise healthy competition over efficiency. 4.6 Non-Competition Issues Under the Merger Control Guidelines and Regu - lation 3/2023, the KPPU will review a transac - tion more positively if it can prevent a party from bankruptcy. The decrease in market players due to bankruptcy would be considered more harmful than a scenario where a market player becomes dominant as a result of the transaction. The KPPU may also consider other non-compe - tition factors during its review, including: • policies to augment the competitiveness and strength of national industries; • development of technology and innovation; • protection of SMEs; • impact on the labour force; and • implementation of the relevant laws or regula - tions. In Indonesia, rules for foreign direct investment are primarily governed and enforced by the Ministry of Investment/Investment Coordinating Board ( Badan Koordinasi Penanaman Modal , or BKPM) and are separate from the merger con - trol rules enforced by the KPPU. Foreign entities may be required to submit certain filings, such as regular investment reports. Although the BKPM predominantly governs and enforces FDI regu - lations, other ministries may also have sector- specific rules concerning FDI. 4.7 Special Consideration for Joint Ventures There are no special substantive tests for joint ventures. The KPPU does not specifically exam - ine potential co-ordination issues between joint
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