The Public Competition Enforcement Review: Indonesia


Law No. 5 of 1999 concerning Prohibition of Monopolistic Practices and Unfair Business Competition (the Indonesian Competition Law (ICL)) is the primary legislation regulating business competition in Indonesia. Besides being the basis for the prohibition of anticompetitive agreements and conducts, the ICL is also the basis for the establishment of the Indonesia Competition Commission (or Komisi Pengawas Persaingan Usaha (KPPU)). As the only authority responsible for the enforcement of the ICL, the KPPU may initiate investigations and examinations as well as issue decisions and impose administrative sanctions for any violation of the ICL. In 2020, the government issued the Law No. 11 of 2020 on Job Creation (the Omnibus Law)2 that partially amends the ICL. The Omnibus Law (1) removes the capped fines of 25 billion rupiah for violations to be further regulated in implementing regulations; (2) removes criminal sanctions for violations of the substantive laws; (3) increases criminal sanctions for obstruction of justice; and (4) changes the forum of appeal against KPPU decisions from district courts to commercial courts.

Since its establishment in 2000, the KPPU has actively enforced the ICL and conducted investigations and examinations in various industries. Up to 2020, the KPPU has issued 358 decisions regarding alleged violation of the ICL.3

In 2020, the KPPU handled 28 competition cases, of which 11 relate to merger notification. This shows that despite the covid-19 situation, the KPPU has not put on hold its scrutiny of domestic and international mergers that are within its jurisdiction. This trend is still in line with the KPPU's 2018's agenda to review transactions completed from 2010 (when the Indonesian Merger Control Rules came into force) in order to identify any that should have been notified but were not. To note, aside from the 28 competition cases, the KPPU also handled eight partnership cases as mandated by the Law No. 20 of 2008 regarding the Micro, Small and Medium Enterprises (the SME Law).

To address the effects of the covid-19 pandemic, the KPPU issued KPPU Regulation No. 3 of 2020 on the Relaxation of Legal Enforcement of Monopoly Practices and Unfair Business Competition and Monitoring of Partnership Implementation to Support the National Economic Recovery (the Covid-19 Relaxation Guidelines) that:

  1. Relaxes the procurement that uses the state budget or regional budget as long as it:
    • is intended to fulfil medical needs or provide supporting facilities to handle covid-19 (e.g., the procurement of medicine, vaccines, construction of emergency hospitals, the appointment of hotels or buildings for isolation); and
    • distributes social assistance from the government to the public.
  2. Provides an approval mechanism for agreements, activities or the use of a dominant position to deal with covid-19 or to increase the economic ability of a business.
  3. Extends the deadline to submit the mandatory post-closing notification to the KPPU from 30 to 60 business days as of the effective date.
  4. Extends the period of written warning in the partnership monitoring procedure from 14 to 30 business days.


The prohibition under the ICL covers several forms of cartel behaviour, including price-fixing, production arrangements, market allocation, boycotts, bid-rigging and other horizontal arrangements that may restrict competition or harm consumers.

The prohibition of cartels, as well as other stipulations under the ICL, applies to an undertaking, which is defined as any individual or business enterprise, whether incorporated or otherwise, established and domiciled or conducting activities within the territory of the Republic of Indonesia, whether individually or jointly through agreement, in the form of various operations in the economic sector. Although the KPPU has included individuals as reported parties in several cases, there is some debate over whether the ICL applies to individuals.

Violation of the ICL is subject to several forms of administrative sanctions. Should the KPPU conclude that a violation has occurred, it has the power to:

  1. annul the anticompetitive agreement or contract, either in its entirety or partially;
  2. order that the vertical integration conduct and any other monopolistic conduct be ceased;
  3. annul the merger and acquisition;
  4. award compensatory damages incurred as a result of anticompetitive conduct; and
  5. impose a fine in the amount of at least 1 billion rupiah up to 50 per cent of net profit or 10 per cent of the turnover, both calculated from the relevant market during the violation period.

Even though the ICL also stipulates criminal sanctions in the form of imprisonment and criminal fines, these sanctions are only applicable when an undertaking has obstructed the investigation or examination carried by the KPPU or did not comply with a legally binding KPPU decision. The enforcement of criminal sanctions is under the jurisdiction of the National Police, since the KPPU is only authorised to impose administrative sanctions. To date there has been no published official guideline on how to perform criminal sanction procedure.

There is no stipulation regarding formal leniency programmes, an 'immunity plus' policy, 'plea bargains' or other forms of binding settlement, or programmes aimed at detecting cartels under the current ICL. The KPPU in its decision might consider the cooperation offered by the reported party as a mitigating factor in determining the imposed fine.

There have been discussions and attempts to implement a leniency programme through amendments of the ICL. Based on the latest draft of the amendment that is available to the public, the KPPU will have the authority to grant a reduction in the fine to undertakings that admit and report certain anticompetitive agreements. The details regarding the procedure for such leniency programme are still unclear, since the latest draft only stipulates that further provision on the leniency programme will be stipulated in a KPPU Regulation.

i Significant cases

In 2020, the only case related to cartels was the cooperation between airlines concerning economy tickets for domestic commercial flights. The case is published under KPPU Decision No. 15/KPPU-I/2019 relating to alleged price fixing and cartel practice in the domestic economy class passenger scheduled commercial air freight service (the Domestic airlines ticket case).

The investigation in the Domestic airlines ticket case was launched at the KPPU's initiative, in which the KPPU's investigators accused seven domestic airlines: (1) PT Garuda Indonesia (Persero), Tbk; (2) PT Citilink Indonesia; (3) PT Sriwijaya Air; (4) PT NAM Air; (5) PT Batik Air; (6) PT Lion Mentari; and (7) PT Wings Abadi (together referred to as the 'reported parties'), of having an agreement on the price of domestic economy flights in Indonesian domestic market, divided into three major groups those are Garuda Group, Sriwijaya Group, and Lion Group, in total holds 95 per cent of the market share. The KPPU's investigators started the investigation in mid-January 2019, and based its investigation on the alleged anomaly of the ticket price after peak season was over. This led to a price increase for domestic flight economy tickets outside of peak season in early 2019 and contributed to the inflation increase in 2019.

In its decision, the KPPU's Commissions Assembly provided its analysis on the movement of the price for the domestic commercial ticket price in 2019 from each reported party based on peak season and low season as best practice in the aviation industry. Based on this analysis, the KPPU's Commissions Assembly concluded that there was a concerted action or parallelism, and that therefore the reported parties were viewed to have a meeting of minds on terminating the discounted price after peak season ended. Without having any evidence indicating an agreement to form a cartel, yet considering that there was a parallelism on terminating discounted ticket prices between the reported parties, the KPPU's Commissions Assembly then declared all reported parties guilty of the price-fixing allegation, but not guilty of creating a cartel. As a result, the reported parties were given a mandatory report regarding its business plan that has the potential to affect the ticket price for two years after the decision was issued.

ii Trends, developments and strategies

Based on the information on the KPPU's website, there was only one cartel case carried out and no cartel cases are currently being examined. The decided cartel case involves three major airline groups in Indonesia, consisting of seven airlines, namely Garuda Indonesia Group, Sriwijaya Group and Lion Air Group.

Separately, the KPPU in July 2020 released information regarding the Supreme Court decision that corroborated the KPPU's decision on the imported cow trade case in Jakarta, Bogor, Depok, Tangerang and Bekasi. The Supreme Court ruled out the appeal and imposed a fine of 59.6 billion rupiah.

iii Outlook

In a media release, the recently elect chairman of the KPPU mentioned that the KPPU will be focusing on the information technology system, digitalisation and the use of e-governance to improve its presence, one of which is to closely observe activity that could potentially be classified as a cartel.

In the coming years, we may also see the long-awaited enactment of the amendment to the ICL. Even though many expected this enactment to take place in 2020, it is understandable that this target was not met considering the emergence of the Omnibus Law. Based on the Omnibus Law, among other provisions, the KPPU is free to implement a fine in a case, since the maximum amount for administrative fines is no longer regulated under the Omnibus Law. Nevertheless, the government has recently issued Regulation No. 44 of 2021 on the Implementation of Prohibition of Monopolistic Practices and Unfair Business Competition that limits the maximum administrative fine to 50 per cent of the net profit or 10 per cent of the turnover, both calculated from the relevant market during the violation period.

Antitrust: restrictive agreements and dominance

Vertical restraint provisions are regulated in Chapter 3 and Chapter 4 of the ICL. In addition to the above, the KPPU has issued several regulations serving as guidelines for interpreting provisions under the ICL.

The ICL stipulates the following specific prohibitions on to vertical restraints:

  1. resale price maintenance: any agreement with distributors or other undertakings obliging distributors to refrain from reselling or resupplying goods or services below the set minimum price, creating an unfair business competition;
  2. vertical integration: any agreements between businesses at different levels of the production chain with the intention of one business controlling the production of the other business's products, in which the latter's products are used as the part or parts of inputs for the former business;
  3. exclusive distribution agreement: any agreement requiring distributors to only supply or not supply such goods or services to certain parties or in particular places;
  4. tying arrangement: any agreement requiring customers who purchase one product or service to purchase another different product or service (the tied product or service);
  5. discount or rebate: any agreement offering certain prices or lower prices on goods or services that requires customers to purchase other goods or services from suppliers or not to purchase suppliers' competing goods or services; and
  6. market control: any agreement requiring suppliers to engage in discriminatory practices against certain undertakings.

There are no industry-specific provisions or rules applicable under the ICL in general or even more specifically for provisions related to prohibitions of vertical restraint.

When assessing vertical restraint under the ICL, the KPPU should undertake an analysis of whether all the elements of the related ICL article have been fulfilled. The KPPU should know the facts concerning the vertical restraint rationale and also the implications of the agreement for all affected parties. Further, the KPPU should stress its analysis of market structure and whether a dominant undertaking has the ability to abuse its market power. The KPPU may also consider whether there are any restrictions on an undertaking's strategy that forecloses access for potential entrants into upstream and downstream markets. Vertical restraint provisions under the ICL adopt the rule of reason approach, which means in order to declare a violation of such articles, the vertical restraint must be proved by (1) the emergence of a negative impact on the market and (2) the motive and economic benefits gained by the undertaking in doing such restraint.

i Significant cases

Since the enactment of the ICL, the KPPU has rarely initiated an investigation for cases related to vertical restraint prohibitions. In 2020, there were only two decisions related to abuse of dominance or vertical restraint, namely KPPU Decision No. 13/KPPU-I/2019 concerning online taxis (Online Taxi case) and KPPU Decision No. 03/KPPU-L/2020 concerning the sale of cement in South Kalimantan (Cement case).

The Online Taxi case was unprecedented, as it imposed a record-breaking administrative fine of 30 billion rupiah on PT Solusi Transportasi Indonesia (STI), the Indonesian entity of Grab. The KPPU also imposed a 19 billion rupiah administrative fine on PT Teknologi Pengangkutan Indonesia (TPI), a provider of transportation rental services that entered into a cooperation with Grab for the provision of partner drivers. Prior to this case, the KPPU had only ever imposed one administrative fine (which did not exceed 25 billion rupiah) on a company even though the KPPU found that a company had violated multiple articles of the Competition Law in previous cases.

The fines were imposed based on the allegation that STI and TPI had engaged in discriminatory practices through, among other things, the implementation of priority order, and tying practice. While the tying allegation was dismissed, the KPPU still found that the discrimination is a breach of Articles 14 and 19(d) of the ICL. The KPPU viewed that the parties intended to dominate or control the market for the supply of technology-based transportation rental services application in Indonesia as their cooperation had resulted in the declining number of partner drivers as well as orders received by non-TPI partner drivers. The KPPU also found that STI had discriminated against non-TPI partner drivers by prioritising orders of and giving more favourable partnering terms to TPI partner drivers. STI and TPI filed an appeal to the South Jakarta District Court, and later the South Jakarta District Court annulled the KPPU's decision. The KPPU filed an appeal to the Supreme Court and the decision has yet to be concluded.

Meanwhile, in the Cement case, PT Conch South Kalimantan Cement (Conch) was accused of predatory pricing by selling its cement products below the production cost and eliminating its competitors in the market. In its decision, the KPPU declared Conch guilty of the allegation and imposed a fine of 22.352 billion rupiah. To date, we are unaware of whether Conch has filed an appeal or not.

ii Trends, developments and strategies

As there were only two decisions relating to vertical restraint prohibition in 2020, there have been no significant developments on the enforcement of the provisions by the KPPU.

iii Outlook

With the rise of digital business in Indonesia, we can expect more enforcement of the provisions by the KPPU towards companies in digital markets.

For vertical restraint prohibitions, one of the challenges of enforcement would be defining the relevant market. Since vertical restraint prohibitions are closely related to abuse of dominance conduct, the challenges in this respect also include the determination of the market shares in order to accurately conclude the relevant parties' dominance in the market.

Sectoral competition: market investigations and regulated industries

In 2017, the KPPU published a report regarding digital economies issues in Indonesia. The report was made as part of the Technical Cooperation Agreement with the Australia Indonesia Partnership for Economic Governance (AIPEG) to promote effective competition policy. The KPPU also conducted some consultations with several stakeholders that have an interest in Indonesia's digital economy, such as the Indonesian Ministry of Trade and the OJK, among others.

The report explains that digital technology is quite disruptive and is transforming the traditional markets and business models. In this era, the relevant stakeholders, such as the government as well as the competition authorities, should be able to protect and empower consumers in a complex and rapidly developing online environment. However, at the same time, the government should be able to maintain the growth of the economy and business, including the growth of digital technology-related businesses.4

Furthermore, the report explains that most of the challenges faced by the government involve the competition between the traditional and digital services providers. Since the governing regulations related to the digital business operations are not similar to the traditional ones, the traditional service providers often face an uneven playing field in the market.

The report also describes that the regulation of digital services is considered challenging as regulators must determine whether there is a basis for regulation; whether the regulation will restrict the market entry; and whether the regulation is practical and enforceable. If regulation is too strict, it can hamper innovation and increase costs, as well as restrict the growth of the Indonesian economy in the future. From a competition perspective, the issue that arises is whether the entry barriers can prevent the competition, and whether they are natural or induced (e.g., by anticompetitive practices or exclusive licences). As such, any regulatory framework on digital technology aspects must be flexible in order to keep pace with and benefit from technological advances. The new framework should also be able to reduce the entry barriers while at the same time maintaining consumer protection and the certainty of rules.5

Further, the report also recommends that to underpin the digital economy and enhance trust from the consumers, a coherent data framework is required. Any data protection must be flexible to further enable innovation. The economic and social benefits of data flows, including increased market access, investment, innovation, development and growth, as well as increased productivity, are best realised when there are no data residency restrictions.6

State aid

Under the current regime, there is no specific provision under the ICL regarding state aid. The KPPU currently does not have any focus on state aid control; therefore, state aid control is not applicable in Indonesia.

Merger review

Perfecting the KPPU Regulation No. 3 of 2019 on Assessment of Merger or Consolidation of Business Entities or Share Acquisition of Companies that could Result in Monopolistic Practices and/or Unfair Business Competition (the 2019 Merger Regulation), the KPPU issued a Guideline on the Assessment of Merger, Consolidation, or Acquisition (the 2020 Merger Guidelines). The 2020 Merger Guidelines came into effect on 6 October 2020.

The most notable features under the 2020 Merger Guidelines compared to the 2019 Merger Regulation are the treatment of a transaction that involves a joint venture, the exemption for asset acquisitions, and the introduction of a simplified assessment process of notification following some additional requirements. The latter, after further verbal clarification from the KPPU, is the most interesting for businesses as it would significantly shorten the time frame to around 74 business days maximum compared to the 150 business days maximum of the traditional merger notification process.

Pursuant to the 2020 Merger Guidelines, entities that qualify as a joint venture will be viewed as its own ultimate parent entity (UPE) of its group. That means any entity owning the joint venture directly or indirectly will be perceived as entities belonging to a different economic group. On the other hand, for asset acquisitions, the 2020 Merger Guidelines would allow asset acquisitions that fulfil certain criteria, such as the transaction value threshold, to be exempted from the notification obligation to the KPPU.

Furthermore, the Indonesian merger control regime adopts a mandatory post-merger notification system whereby all mergers that satisfy the statutory threshold and certain criteria shall be notified to the KPPU within 30 business days of the transaction becoming legally effective.7 Under the 2019 Merger Regulation, the KPPU outlines four transactions that are subject to the Indonesian merger control rules: mergers, consolidation, share acquisition and asset acquisition (hereinafter collectively referred to as 'mergers').8 As mentioned earlier, the KPPU also acknowledges the significance of the covid-19 situation, thus through the Covid-19 Relaxation Guidelines, the deadline to file has been extended to 60 business days. Nevertheless, the KPPU can at any time revoke the Covid-19 Relaxation Guidelines, so we suggest that the transacting parties try their best to submit the notification within the 30-business-day deadline so as to avoid the late notification fines.

In general, the criteria for notifiable mergers under Indonesian merger control are as follows:

the transaction satisfies the statutory threshold. The above notification thresholds also apply to asset-based transactions. However, the calculation of asset threshold in asset-based transactions is calculated based on the worldwide value of the assets of (1) the buyer group; plus (2) the value of the purchased assets as stated in the target's financial statements. If the number (2) above is not available, the KPPU will look at the value of the transaction. The thresholds are:

  1. the combined sales value in Indonesia of the merging parties (buyer and target) exceeds 5 trillion rupiah; or
  2. the combined worldwide assets value of the merging parties (buyer and target) exceeds 2.5 trillion rupiah. If both of the merging parties are banks, the combined asset value must exceed 20 trillion rupiah. If only one of the merging parties is a bank, it must adhere to the asset value threshold of 2.5 trillion rupiah;9
  3. the transaction is performed by and between non-affiliated parties;10
  4. the transaction results in a change of control;11 and
  5. specifically for an asset-based transaction, the transaction can trigger a notification if:
  6. the assets are not sold under an ordinary sales activity; and
  7. it increases the acquirer's market share or integrate vertically with the business activities of the acquirer or its group company.12

For foreign mergers, pursuant to the 2020 Merger Guidelines, there is one additional criterion that needs to be satisfied: a double local nexus (i.e., both parties to the transaction has any business activities in or make sales to Indonesia).13 However, this approach is different from that of the 2019 Merger Regulation that only requires a single nexus, or the Indonesian sales or assets or presence of either party to the transaction suffices the obligation to file post-closing. Note that the 2020 Merger Guidelines do not revoke the 2019 Merger Regulation but only provide further guidance on how to implement the latter. Thus, it is advisable to seek further clarity for foreign-to-foreign transactions involving a single local nexus to Indonesia.

i Significant cases

Since the enactment of the regulation of Indonesian merger control in 2010, the KPPU has never issued any opinion with objections. An opinion will be issued only if there is any alleged potential of anticompetitive impact resulting from the merger. To date, the KPPU has only issued no objection opinions with or without remedies. Based on publicly available opinions, to date the KPPU has issued around nine no objection opinions with remedies. One of the recent high-profile conditional no objection opinions is the acquisition of shares of Vinythai Public Company Ltd (Vinythai) by Asahi Glass Company Ltd (Asahi). Asahi is a Japanese company that engages in the production of glass, electronic chemicals and ceramics. Meanwhile Vinythai as the target company is domiciled in Thailand and engages in the manufacture of polyvinyl chloride (PVC) and epichlorohydrin, which are mostly used in the plastic industries.

In its assessment, the KPPU only focused on one type of PVC product sold by Vinythai in Indonesia, namely suspension PVC (S-PVC). S-PVC is used for the production of pipes, film and sheets, floors, bottles, cables and other things. In its opinion, the KPPU found that one of Asahi's subsidiaries in Indonesia was the market leader in PVC, with a market share of more than 50 per cent. This resulted in a significant increase in the Hirschman-Herfindahl Index (HHI) for this transaction particularly on the S-PVC market. The KPPU then continued the assessment on this transaction to Phase II (comprehensive assessment) as the HHI was higher than 1,800.14

Based on KPPU's Phase II assessment, there was a significant structural barrier for the S-PVC market in Indonesia. The KPPU also found that based on upward pricing pressure (UPP) analysis, this transaction could put significant pressure on the domestic price of S-PVC. The result from the efficiency test also showed that the potential efficiency of this transaction may not lead to a price decrease to one of the merging party.

Considering the above analysis, the KPPU decided to issue a no objection opinion towards this transaction with the following conditions:

  1. Asahi should report their production, sales and price of S-PVC in Indonesia to the KPPU on a quarterly basis for the next three years; and
  2. Vinythai should report its export and price of S-PVC to Indonesia on a quarterly basis for the next three years.

The above conditions were imposed by the KPPU on the merging parties to prevent the acquisition from resulting in anticompetitive effects.

In addition, to date there have been at least 29 decisions issued by the KPPU related to the failure to notify mergers. Among these 29 cases, the KPPU imposed penalties on 26 transactions. As for the remaining two cases, the KPPU decided that the merging parties in those transactions were not proven guilty for the failure to notify allegation.

One of the significant cases on merger control enforcement in 2018 that were not proven guilty is the decision of the late notification of PT Erajaya Swasembada, Tbk (Erajaya), an Indonesian company engaged in the mobile phone import industry. Erajaya was alleged to have notified its acquisition of PT Axioo International Indonesia (Axioo), an Indonesian company in the mobile phone manufacturing industry, 145 business days late. Even though Erajaya was found to have notified the transaction late, the KPPU did not impose any sanction on Erajaya, considering that its acquisition over Axioo was conducted in order to comply with the requirement under the Ministry of Trade Regulation which obliges mobile phone distributors to have a manufacturing facility in Indonesia.

Thus far there is only one foreign transaction that has been sanctioned by the KPPU due to failure to notify, which is the share acquisition of Woongjin Chemical Co by Toray Advanced Material Korea Inc.

In 2019, the KPPU imposed the highest fine ever in a failure to notify case in the amount of 12.6 billion rupiah on PT Matahari Pontianak Indah Mall for submitting the notification of the share acquisition of PT Indo Putra Khatulistiwa 240 business days past the deadline. In April 2020, pursuant to the KPPU press release, PT Matahari Pontianak Indah Mall repeated the same mistake and was fined 1 billion rupiah after being found guilty of late notification by 415 days.

Thus far there is only one foreign transaction that has been sanctioned by the KPPU over failure to notify, namely the share acquisition of Woongjin Chemical Co by Toray Advanced Material Korea Inc. Both Toray Advanced Material Korea Inc and Woongjin Chemical Co had business activities and sales in Indonesia. Subsequently, their combined asset and sales value met the threshold and, therefore, the acquisition transaction triggered a notification obligation in Indonesia. The KPPU imposed a fine of 2 billion rupiah on Toray Advanced Material Korea Inc for submitting the notification of the share acquisition of Woongjin Chemical Co four business days past the deadline.

Currently, the KPPU is quite active in carrying out merger control investigations in Indonesia. During 2018, the KPPU issued eight decisions or half of the total number of all decisions on the failure to notify cases issued until that year. In 2019, such number was increased to 12. In 2020, the KPPU only issued eight decisions on late merger filing. All of the decisions issued in 2018, 2019 and 2020 were related to domestic transactions.

ii Trends, developments and strategies

In 2020, the KPPU received 102 notifications of mergers.15 There was an increase in the number of mergers notified to the KPPU in 2020 compared with 2019, which was only 88 transactions.16 This significant increase is to be expected, as it is partly due to the expansion of the scope of mergers and transactions that must be notified to the KPPU that now also includes asset acquisitions in 2018.

Furthermore, there were no updates on the KPPU's website regarding the 2019 notification list after 1 July 2020. Between 3 January and 1 July 2020, there were 63 share acquisitions, 37 asset acquisitions and two mergers submitted to the KPPU.17

Based on the KPPU's website, between 3 January and 1 June 2020, eight out of 39 notifications were foreign-to-foreign transactions. In 2020, the foreign-to-foreign transactions involved entities from countries such as Germany, France, India, the Netherlands, Japan and Singapore.18

The KPPU has not issued any public opinion for mergers submitted in 2019 and 2020. Therefore, the details of the mergers submitted in 2019 and 2020 are not publicly available yet. In 2018, however, the most notified mergers related to the manufacturing industry (35.4 per cent), the energy sector (17 per cent) and the property sector (14 per cent). There were several mega transactions whose values exceeded 1,000 trillion rupiah notified to the KPPU in 2018, which included:

  1. the acquisition of PT Freeport Indonesia by PT Inalum;
  2. the merger between KWA Investment Co and Monsanto Company;
  3. the acquisition of PT Bank Danamon, Tbk by MUFG Bank Ltd; and
  4. the acquisition of TMF Orange Holding BV by Saphire Bidco BV.19

iii Outlook

Based on the previous draft, one of the key points in the amendment of the ICL related to the merger control issue is the change from a mandatory post-merger notification to a pre-merger notification regime.20 Nevertheless, the current House of Representatives has removed the amendment of the ICL from the 2021 agenda of laws to be amended. There is no further information on the timeline of the amendment and whether the current members will use the draft amendment of the ICL prepared by the previous member of the House of Representatives.


Aside from the KPPU's greater focus on merger control enforcement during 2019, with the enactment of the new 2019 Merger Regulation, we expect to see an increase in the number of transactions reviewed by the KPPU as asset-based transactions are now subject to the notification to the KPPU. At the time of writing, we had found no publicly available information on asset transactions notified to the KPPU. In the coming year, we can expect the KPPU to put more effort into cartel enforcement, particularly in industries that are closely related to the interest of the general public, such as food commodities and airlines, as well as industries that are strategic in nature and undergoing rapid growth, such the fintech industry.

Despite the unclear timeline of the amendment to the ICL, the KPPU will surely benefit from the amendment, both in its cartel and merger control enforcement. The implementation of the extraterritoriality principle through the amendment will provide the KPPU with the power to review and supervise cross-border agreements, activities, and transactions that potentially affect the Indonesian market. This may be necessary to address the developing competition issues entailing the rise of the digital economy that by nature are likely to involve markets in different jurisdictions.


1 HMBC Rikrik Rizkiyana, Farid Fauzi Nasution, and Vovo Iswanto are partners at Assegaf Hamzah and Partners. HMBC Rikrik Rizkiyana and Farid Fauzi Nasution co-heads of competition practice group.

2 In order to foster the creation of employment, push further the business development and growth, the Law No. 2 of 2019 on Job Creation, or Job Creation Law, amended more than 70 sectoral laws, and even amended or revoked hundreds of regulations. Considering the impacts over various sectors, thus the name Omnibus Law is also known for the Job Creation Law.

3 The authors' own calculation based on the KPPU's website.

6 See the Digital Economy in Indonesia Report.

7 See Indonesian Government Regulation No. 57 of 2010 on Merger or Consolidation of Business Entities and Acquisition of Shares that may result in Monopolistic and/or Unfair Business Competition Practices (GR No. 57/2010), Article 5(1).

8 See GR No.57/2010, Article 1.

9 See GR No.57/2010, Article 5(2).

10 See the KPPU Regulation No. 3 of 2019 on Assessment of Merger or Consolidation of Business Entities or Share Acquisition of Companies that could Result in Monopolistic and/or Unfair Business Competition Practices (Merger Guidelines 2019).

11 See Merger Guidelines 2019.

12 See Merger Guidelines 2019.

13 See Merger Guidelines 2019.

15 This was recorded in as of February 2021. The actual figures may be higher at the time of writing; the KPPU website only records the notifications filed up to 1 July 2020.

16 This was recorded in at the time of writing. It is possible that the actual figures may now be higher.

17 This was recorded in the time of writing. It is possible that the actual figures may now be higher.

18 This was recorded in the time of writing. It is possible that the actual figures may now be higher.

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