Tax & Trade
Amendment to the Anti-Monopoly to be Discussed by the House of Representatives
Business Competition Supervisory Commission ("KPPU") has been considering amending the Anti-Monopoly Law for years. In January 2014, an agenda item to amend the Anti-Monopoly Law was added to the National Legislation Program of the House of Representatives for discussion in 2014 along with 65 other draft laws. There is no assurance that the House of Representatives will pass the amendment in 2014 and issues may be added on or dropped during the House of Representatives' deliberation. That said, the following are issues that KPPU has been discussing and advocating publicly and should therefore be discussed in the House of Representatives:
1. Mandatory Pre-Completion Notification
The current Anti-Monopoly Law only requires post-completion notification of transactions that meet certain criteria, i.e., transactions must be notified within 30 working days after the transactions are completed. According to KPPU, the best practice is to have notification before a transaction is closed. It gives more certainty for parties to the transaction and avoids high costs and complications of unwinding transactions if the competition agency finds that the transaction will substantially lessen competition.
2. Joint Venture and Assets Acquisition
The current Anti-Monopoly Law only requires notification of mergers, consolidations and share acquisitions. Under the current law, there is no mention of asset acquisitions or joint venture establishment being also subject to a notification requirement. As asset acquisitions and joint venture establishment could have the same results as a merger, consolidation or share acquisition, KPPU is trying to include joint venture establishment and asset acquisitions as transactions that are also subject to notification if certain criteria are met.
3. Dawn Raids and Confiscation
The current Anti-Monopoly Law does not authorize KPPU to conduct dawn raids or confiscate evidence. According to KPPU, it could not obtain hard evidence of the alleged activities, and it lost many cases in court as a result. Therefore, KPPU is trying to add more investigative power so it can conduct dawn raids on business premises and confiscate evidence from parties during investigations.
Tax & Trade
2 Amendment to the Anti-Monopoly to be Discussed by the House of Representatives February 2014
4. Compel Persons for Investigation
The current Anti-Monopoly Law does not authorize KPPU to force
parties to appear before a KPPU investigation and it does not provide a
legal mechanism for doing so. According to KPPU, this has hampered
its investigation and collection of evidence. Therefore, KPPU is trying to
get a clear legal mechanism in place that will authorize it to force parties
to appear for KPPU investigations.
It appears that the above amendment proposals follow the model of more
developed competition laws in other jurisdictions. If the House of
Representatives approves all the above amendment proposals, the
Indonesian Anti-Monopoly Law will be more aligned with those of developed
jurisdictions. Consequently, it will affect more transactions and at the same
time, KPPU will have more power to enforce it. Therefore, business actors will
need to pay more attention to compliance with the Anti-Monopoly Law.
For further information please contact
+62 21 2960 8694
+62 21 2960 8547
Farid F. Nasution
+62 21 2960 8525
Hadiputranto, Hadinoto & Partners
The Indonesia Stock Exchange
Building, Tower II, 21st Floor
Sudirman Central Business District
Jl. Jenderal Sudirman Kav. 52-53
Tel: +62 21 2960 8888
Fax: +62 21 2960 8999
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