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The New KPPU Regulation

The New KPPU Regulation on the Procedures of Case Handling of Monopolistic Practices and Unfair Business Competition

The KPPU Regulation No. 1 Year 2019 regarding the Procedures of Case Handling of Monopolistic Practices and Unfair Business Competition, has replaced the KPPU Regulation No. 1 Year 2010. This new regulation, however, will not jeopardize and/or delay the current proceedings which already opt-in with the previous regulation and have not yet received a decision from KPPU, thus the previous regulation will still remain in power for those proceedings1 .

These are the following changes, which are not regulated within the KPPU Regulation No. 1 Year 2010, that in our view should be taken into consideration for business practitioners in Indonesia:

  1. The Reported party may be declared a decision by Council of KPPU, if during the hearing process the reported party is absence after KPPU has properly given two summon letters to the Reported party2.

    The new regulation did not provide a rebuttal mechanism for the Reported party to request annulation or deny the said decision during the process in KPPU, it might happen that the Reported party did not receive the summon letter due to some of the unfortunate circumstances, such as change of address or any other force majeur situation which may be the cause of failure to receive the summon letter. Thus, the only available legal action is to apply an objection to the relevant district court as provided by the Law No. 5 year 1999;

  1. During the proceedings in KPPU, The Council may grant an opportunity for behavior change for the Reported Party, the Reported party's commitment to make changes on the behavior will be stated within the Behavior Integrity Pact signed by the Reported party. Implementation of the Behavior Integrity Pact becomes an object of supervision by the KPPU for 60 (sixty) days.
  1. Every letter or document to be submitted as evidence shall be legalized by the Postal Office3.

    These practices are usually occurred during the proceedings in a Court as governed under the Law No. 13 Year 1985, this provision is somehow indirectly indicated that KPPU is a “Court”, which if we look into Law No. 5 Year 1999, the nature of KPPU is not a court and only a state auxiliary organ with an authority to examine and declare whether there are monopolistic practices and unfair business competition conducted by business practitioners. Furthermore, if we compare it to the KPPU Regulation No. 1 Year 2010, the said regulation does not have the legalization requirement for any letter or document which will be submitted as evidence.

  1. One of the types of evidence which may be submitted to the Council of KPPU during the examination process is clue. A clue can now be determined into two, first, economic evidence, it is the use of economic arguments supported by analytical methods quantitative and/or qualitative data and results of expert analysis, which all of them aim to strengthen the allegation of monopolistic practices and/or unfair business competition4 ; and second, communication evidence, it is the utilization of data and/or documents indicating that there was an exchange of information between parties suspected of practicing monopoly and/or unfair business competition5.

    If we look closely to the underlined sentence, both economic and communication evidence cannot be properly utilized by the Reported party to support their arguments that their business practices are unmonopolistic and fair. Since the utilization of economic and communication evidence is only limited to strengthen the allegation of monopolistic practices and/or unfair business competition, which in other words it will be beneficial for the investigator and/or Council in KPPU during the investigation and examination process.

All in all, the new regulation is far more detail and comprehensive compared to the previous regulation. However, from the abovementioned changes, KPPU should provide a fairness, certainty and balance mechanism to business practitioners who is under the allegation of monopolistic practices and/or unfair business competition.

 

For further information, please contact:

  • Putu Surya Resa Aditya, S.H., LL.M.
  • Business Development

 

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1 Article 76 of KPPU Reg No. 1/2019.
2 Paragraph (5) and (6) of Article 30 of KPPU Reg No. 1/2019.
3 Paragraph (2) of Article 55 of KPPU Reg No. 1/2019.
4 Paragraph (3) of Article 57 of KPPU Reg No. 1/2019.
5 Paragraph (4) of Article 57 of KPPU Reg No. 1/2019