ICC accepts behavioural change in lieu of fine

For the first time a defendant has succeeded in avoiding a fine by ceasing the relevant conduct under a Change of Behaviour Integrity Pact.

After PT Pupuk Kalimantan Timur ("PT PKT") was found to have entered into an unlawful tying agreement, the Indonesian Competition Commission ("ICC") asked that it change its behaviour, as provided in their Change of Behaviour Integrity Pact from 18 March until 17 June 2022. In the trial on 26 June 2022, the ICC noted that PT PKT has conducted the change of behaviour and decided to discontinue the case.

Under Indonesian Competition Law, the ICC may grant an opportunity to reporting parties to change their behaviour. If the ICC decides that the reporting party has changed its behaviour in accordance with a Change of Behaviour Integrity Pact, the ICC may decide to not continue the review of the case. The ICC has previously granted a behavioural change request in the past but, in that case the ICC decided to apply a penalty regardless because the defendant was found to have violated the Competition Law.

This case shows that it is possible to successfully avoid a fine in cases where the case is about an anti-competitive action (e.g. tying) that can be remedied by the defendant ceasing the relevant conduct.

Lobster exporter avoids ICC fine due to inability to pay

The ICC had considered imposing a sanction in the form of a fine amounting to around IDR 7 billion on PT Aero Citra Kargo ("PT ACK") for conducting an unlawful monopoly in the relevant export market for lobsters. However, the ICC took into account that in a separate case, a Civil Court had confiscated all of PT ACK's funds. In addition, its sales and net profit in the last financial year were nil.

Accordingly, although the ICC decided that PT ACK violated the Anti-Monopoly Law, the ICC did not impose any administrative sanction on PT ACK.

The above is in accordance with the ICC guidelines on the imposition of sanctions, which require the ICC to consider the capability of the reported party to pay a fine. ICC also has the option of ordering payment of fine and damages by instalments. Notably, the ICC also recommended that the Government revoke PT ACK's business license.

This case illustrates that it is possible to escape a fine by pleading financial hardship, though only in exceptional circumstances. In this case, it appears that the ICC considered there was no realistic chance that PT ACK could to pay a fine because it had ceased doing business.