Indonesia Competition Commission (ICC/KPPU)
Indonesia
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Indonesia Competition Commission (ICC/KPPU)

Indonesia Competition Commission (ICC/KPPU)

Indonesia

From the Enforcer: Indonesia

Address: KPPU Building, Jl. Ir H Juanda No.36, Jakarta Pusat, 10120, Indonesia
Tel: +62 21 34831563
Fax: +62 21 3507008
Email: [email protected]
Web: eng.kppu.go.id

Contacts

Kurnia Toha
Chairman
Email: [email protected]

Ukay Karyadi
Vice Chairman
Email: [email protected]

Charles Panji Dewanto
Secretary General
Email: [email protected]

Setya Budi Yulianto
Deputy, Law Enforcement
Email: [email protected]

Taufik Ariyanto
Deputy, Policy and Advocacy
Email: [email protected]

Retno Wiranti
Head of Cooperation Division
Email: [email protected]

Questions and answers

How long is the head of agency’s term of office?

Indonesia Competition Commission is a decision-making body composed of commissioners working with a collegial system. The commissioners serve for a five-year term. Their assignment can be extended for one more terms of office.

When is he or she due for reappointment?

The KPPU is undergoing a new leadership with the appointment of nine new commissioners in May 2018. In this period, the commissioners elected Kurnia Toha and Ukay Karyadi as the new chairman and vice chairman.

Which posts within the organisation are political appointments?

The commissioner position at the KPPU is a political appointment. The election process takes up to five months. An independent team elected by the President selects several government officials, academics, business people or lawyers to screen the candidates to be nominated to parliament. The selected nominees are then recommended to the President for his approval for appointment. The President will appoint the nominees once they pass the fit and proper test and receive approval from the parliament. Before the process in parliament, by way of public disclosure, the public may also review the selected candidates. For this, the independent team will announce the shortlisted candidates in the national newspaper.

What is the agency’s annual budget?

The KPPU’s resources comes from the state budget. However, the law leaves open the possibility that the KPPU’s budget be supplemented by alternative sources, such as a grant or loan (for example, international donors). The KPPU’s current budget is approximately US$8,8 million.

How many staff are employed by the agency?

The total number of staff employed is around 401 people, including the director, manager, investigator, auditor and administrative staff in head quarter and regional representative office

To whom does the head of the agency report?

As per article 35 g of the Competition Law, the KPPU is required to report to the President and to the People’s Legislative Assembly.

Do any industry-specific regulators have competition powers?

No. The KPPU is the only agency that enforces and promotes competition law and policy. However, the KPPU may cooperate with industry-specific regulators concerning competition matters.

Do politicians have any right to overrule or disregard the decisions of the authority?

No. Politicians have no rights to overrule or disregard the KPPU’s decisions. According to the law, decisions only can be appealed through the district court and the Supreme Court.

Does the law allow non-competition aims to be considered when taking decisions?

Yes. The Competition Law contains a number of exclusions and exemptions that use broad concepts. Some of these are included to address industrial and socioeconomic policy goals such as promoting innovation, public interest, small and medium-sized businesses and so on. Several guidelines issued in defining the concept of exclusion and exemption are stipulated in the law.

Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this?

Article 44 (2) states that a business actor may appeal to the district court no later than 14 days after receiving notification of the aforementioned decision. A party that has submitted an appeal to the district court and is dissatisfied with the decision, may proceed their appeal to the Supreme Court within 14 days of receiving notification of the district court decision.

Has the authority ever blocked a proposed merger?

No.

Has the authority ever imposed conditions on a proposed merger?

Yes. The KPPU has imposed several conditions on a proposed merger. The purposes of conditions are to ensure that the output from merger will not violate Law No. 5 of 1999. There are some conditions that the KPPU will impose on a proposed merger:

  • the KPPU will impose structural conditions to restrict the size of merging parties to not become a dominant firm in the market or industry, for example, conditions such as divestments;
  • the KPPU will impose a behavioural condition to ensure that the merging parties will not use its market power to harm the competition or the consumer. Conditions include eliminating barriers to entry, bundling and tying in, and others; or
  • if necessary, the KPPU can give recommendation to the government for overseeing the result of a merger if the industries are highly regulated.

Has the authority conducted a Phase II investigation in any of its merger filings?

The KPPU will conduct a Phase II investigation if Phase I – used to determine the concentration change caused by merger – shows that the concentration in the industry is changed drastically as a result of the merger. In that case, the KPPU’s will conduct a Phase II investigation with an emphasis on barriers to entry, efficiency, the potential for anticompetitive behaviour and a failing firm defence (if any). One of the examples is the acquisition of PT Axis by PT XL Axiata in 2012.

Has the authority ever pursued a company based outside your jurisdiction for a cartel offence?

Not for a cartel offence. However, there are some practices where the KPPU has imposed sanctions on foreign-based companies. This is done on the condition that they are doing business in Indonesia.

Do you operate a leniency programme? Whom should potential applicants contact?

There is no leniency programme. However, the KPPU has included a leniency programme to be adopted in the amendment of the law.

Is there a criminal enforcement track? If so, who is responsible for it?

If there is a criminal finding on a competition case, it is transferred to the police, the attorney general, the Commission for the Eradication of Corruption or to concerned criminal bodies.

Are there any plans to reform the competition law?

Yes. The KPPU is facing the amendment process of the law by the parliament, to be completed this year.

When did the last review of the law occur?

The law has not been reviewed since it was enacted in 1999.

Do you have a separate economics team? If so please give details.

We have a separate economics directorate who deals with economic analysis, research and market study.

Has the authority conducted a dawn raid?

The KPPU does not have the authority to conduct a dawn raid.

Has the authority imposed penalties on officers or directors of companies for offences committed by the company?

If the offence is committed by the company then penalties will go to the company, not their officers or directors, unless the individual acts at their own interest.

What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?

Indonesia uses a post-merger notification. A certain amount shall consist of:

  • asset value in the amount of 2.5 trillion rupiah; or
  • sales value in the amount of 5 trillion rupiah.

For business actors engaged in the banking sector, the obligation to provide written notice shall be applicable in the event that the asset value exceeds 20 trillion rupiah.

Are there any restrictions on minority investments that involve less than a majority stake in the business?

There are no such restrictions for those that are not in the negative list of investment issued by the government.


Indonesia: from the enforcer's competition economists

Address: KPPU Building, Jl Ir H Juanda No. 36, Jakarta Pusat, 10120, Indonesia
Tel: +62 21 34831563
Fax: +62 21 3507008
Web: eng.kppu.go.id

Contacts

image 39

Retno Wiranti
Head of Cooperation Division
Tel: +62 21 34831563
Email: [email protected] / [email protected]
Email: [email protected]

Questions and answers

How many economists do you employ?

The Indonesia Commission Commission (KPPU) employs 129 officials with economics degrees.

Do you have a separate economics unit?

Yes, we have a separate economics directorate that deals with economic analysis, research and market study.

Do you have a chief economist?

No, we don’t.

To whom does the chief economist report?

Not applicable.

Does the chief economist have the power to hire his or her own staff?

Not applicable.

How many of your economists have a PhD in industrial economics?

None of our internal (permanent) staff have a PhD in industrial economics.

Does the agency include a specialist economist on every case team? If not, why not?

Yes we do. In cases where economic analysis and impact analysis are considered as essential in proving the violation, a specialist economist is included in the team.

Is the economics unit a ‘second pair of eyes’ during cases – is it one of the agency’s checks and balances? If not, why not?

No, it isn’t. The economist’s main role is to directly assist the case, not to play a role in reviewing whether analysis performs well throughout the case.

How much economics work is outsourced? What type of work is outsourced?

There is more than one piece of economics work each year. An example of economics work that is outsourced is market surveys.

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