EnforcementComplaints procedure for private parties
Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?Pre-investigation stage
Under the ICL and its subsequent regulations; namely, Indonesian Competition Commission (KPPU) Regulation No. 1 of 2019 on the case handling procedure of Monopolistic Practice and Unfair Competition Cases (Case Handling Regulation), the private parties may file a complaint (or a report) to the KPPU with the following procedures:
- a report on an alleged violation or violations can be submitted at any time and there is no particular form that the reporting party needs to fill in or structure that needs to be satisfied. The report must be addressed to the chairperson of the KPPU and satisfy the administrative requirements, such as clear identities of the reporting and reported parties, brief elaboration of the alleged violation of the ICL, and the preliminary evidence; and
- clarification of a report on an alleged violation or violations: this is the stage at which the report will be administratively assessed by the report clarification team. The clarification of a report aims to check the following:
- completeness of the report administration;
- clear identities of the reported parties;
- clear information on witnesses’ addresses;
- compatibility between the evidence and the alleged violation or violations; and
- whether the report is within the KPPU’s jurisdiction.
If all the requirements are satisfied, the report will proceed to the investigation process, a stage at which the assigned investigators shall acquire at least two pieces of evidence of ICL violation. If the requirements during the investigation process are fulfilled, the report will become a case and an examination hearing will be commenced.
The investigators shall report their investigation to the commission assembly no later than 60 working days from the date of record in the investigation registration book. The commission assembly may extend the investigation period for a maximum of 60 working days after the end of the investigation. An undertaking that has allegedly violated the ICL will be named as the ‘reported party’.
Preliminary examination stage
The commission council will summon the reported parties and the investigators will then read the report on the alleged violations. The reported parties are allowed to submit a defence and a list of witnesses, experts and any other relevant documents. The hearing will be open to the public unless there are confidential issues that will be presented by the parties before the commission council. The examination must be concluded no later than 30 working days after it started. Within such period, the commission council and the registrar will draft a report on the preliminary examination (the preliminary examination report), which is presented to the commission assembly.
Under the Case Handling Regulation, the reported party can plead guilty at the beginning of the preliminary examination stage and then propose the behavioural remedy to the Commission Council. Once the Commission Council agrees with the proposal for behavioural remedy, the reported party is required to sign an integrity pact containing the reported party’s guilty plea and commitment to stop or cease the anticompetitive conducts or agreements. The KPPU will then monitor the implementation of the integrity pact for a certain period imposed by the KPPU.
Further examination stage
If the reported party disregards the behavioural remedy, the commission council will determine a further examination schedule. In this phase, the commission council will examine the evidence presented by the investigators and the reported party. The commission council will summon all the witnesses and experts to testify at the hearing. The reported party shall be duly informed of the hearing schedules in the further examination stage. The investigators and the reported party may cross-examine the witnesses and experts. Before further examination ends, the commission council will allow the investigators and the reported party a chance to present their written conclusion. This further examination shall end 60 working days after it began, and can be extended for a period of 30 working days.
Commission council hearing and commission’s decision
Following a further examination stage, the commission council must be held within 30 working days of the end of the further examination period.Regulatory enforcement
How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?
Cases investigated by the KPPU are still dominated by bid-rigging cases, and there has recently been a small increase in cartel cases. The number of vertical restraint-related cases, however, remains very low. Few cases were related to tying or bundling provisions.
What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?
Theoretically, a contract containing a prohibited vertical restraint should not be null and void as a whole; only the related clauses should be declared null and void. However, the ICL grants authority to the KPPU to revoke an agreement that contradicts provisions under the ICL. This authority gives the possibility for the KPPU to revoke the whole agreement, and there are precedents for this in several cases, although some of these have been dismissed by the higher courts.
May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?
The KPPU may directly impose administrative sanctions to undertakings found guilty of violating the ICL. It may pass such orders as it deems fit, including annulment or adjustment of agreements or an order to discontinue any practice considered as monopolistic or unfair. The KPPU may also impose a penalty upon each undertaking involved in such a violation, between 1 billion Indonesian rupiahs and 25 billion Indonesian rupiahs on each undertaking.Investigative powers of the authority
What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?
The KPPU has the authority to:
- receive complaints;
- summon parties and witnesses;
- make conclusions from investigations and hearings;
- request statements or clarification from related government institutions;
- determine and stipulate the existence of losses on undertakings or society; and
- impose administrative sanctions.
The investigative powers are set out in broad wording, such as:
- ‘conduct research’;
- ‘conduct investigation’; and
- ‘obtain, examine or evaluate’ letters, documents or other instruments of evidence.
Currently, the KPPU has no authority to conduct search and seizure, dawn raids or other commanding investigative powers. These may be amended once the new draft is passed.Private enforcement
To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?
Private parties may file a report and seek damages. However, in these cases, the onus is on the plaintiff to provide sufficient evidence of the offence and not on the KPPU. The procedures for filing a report and seeking damages are generally similar, except that the plaintiff or reporting party will deal directly with the reported party and the KPPU will sit as the judges.