The amendment process of Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition (“ICL“) started 2 years ago, but the process was delayed due to the selection procedure of the KPPU’s commissioners for the office term of 2018-2023 (Komisi Pengawas Persaingan Usaha-the Indonesian Competition Authority). As the commissioners are appointed, the House of Representatives (“DPR“) is now putting its focus on the amendment of the ICL. According to the DPR’s schedule, the amendment should be finalized on 19 July and will be promulgated shortly after.
At the current state of discussion, there are some differences between the Government’s and the DPR’s position on the amendment. Some key amendment issues are set out below:
|Administrative fines||The DPR proposes a higher administrative fines, up to 30% of sales value generated during the period of violation, while the Government proposes a lower maximum fine, up to only 25%.|
|Merger notification||The pre-closing merger notification regime becomes mandatory. Fines up to 30% of the transaction value may be imposed for any failure to notify.|
|Leniency programme||Introduction of a short provision on leniency programme and details of the programme will be set forth in a subsequent regulation.|
|Exemptions from the application of ICL||Currently, the exemptions from the application of the ICL can only be granted by law. The government proposes to add possibilities to introduce exemptions by regulation (below undang-undang level)..
The DPR proposes to remove agreements related to intellectual property rights exemption.
|Interim order by KPPU||The amendment provides the KPPU an authority to impose a temporary order at the beginning of the hearing, pending unlawful causes before the KPPU’s final decision.|
|Extra-territorial application||Introduction of the extra-territorial jurisdiction application of the ICL on the basis of the “effects” doctrine, which permits the exercise of the jurisdiction over the extra-territorial activities of foreigners which produce economic effects within the territory, in the context of the competition policy.|
|Repeal of the KPPU related provisions||The DPR aims to repeal all the ICL provisions related to the KPPU and to transpose the KPPU related provision to a subsequent regulation which will be drafted later; this action can affect the legitimacy of the KPPU’s authorities during the transition period.|
Further change on the ICL amendment is still possible until the amendment is passed. After the new ICL is issued, we will organize a seminar on the effect of new competition law to your business.
AHP Client Alert is a publication of Assegaf Hamzah & Partners. It brings an overview of selected Indonesian laws and regulations to the attention of clients but is not intended to be viewed or relied upon as legal advice. Clients should seek advice of qualified Indonesian legal practitioners with respect to the precise effect of the laws and regulations referred to in AHP Client Alert. Whilst care has been taken in the preparation of AHP Client Alert, no warranty is given as to the accuracy of the information it contains and no liability is accepted for any statement, opinion, error or omission.