From the Enforcer: Indonesia
Guntur Syahputra Saragih
Charles Panji Dewanto
Setya Budi Yulianto
Deputy, Law Enforcement
Deputy, Policy and Advocacy
Head of Cooperation Division
Questions and answers
How long is the head of agency’s term of office?
The 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 ICC is undergoing a new leadership with the appointment of nine new commissioners in May 2018. In the second part of this period, the commissioners elected … and Guntur Syahputra Saragih as the new chairman and vice chairman.
Which posts within the organisation are political appointments?
The commissioner position at the ICC 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 ICC’s resources come from the state budget and certain percentages from administrative penalties paid by the businesses. The law also leaves open the possibility that the ICC’s budget be supplemented by alternative sources, such as a grant or loan (for example, international donors). The ICC’s current budget is approximately US$ 9.9 million.
How many staff are employed by the agency?
The total number of staff employed is around 446 people, including the director, manager, investigator, auditor and administrative staff in headquarters and regional representative office.
To whom does the head of the agency report?
As per article 35 g of the Competition Law, the ICC is required to report to the President and the Parliament.
Do any industry-specific regulators have competition powers?
No. The ICC is the only agency that enforces and promotes competition law and policy. However, the ICC 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 ICC’s decisions. According to the law, decisions can only be appealed through the Commercial 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?
The Omnibus Law on Job Creation (Law No. 11 of 2020) amended some articles in Law No. 5 of 1999. One of the changes is the appeal against the ICC's Decision is no longer handled by the District Court but the Commercial Court. As the Implementing Regulation to that Law, Government Regulation No. 44 of 2021 regarding the Implementation of Prohibition of Monopolistic Practices and Unfair Business Competition was issued, and Article 19 (1) stated that a Business Actor may lodge an objection to a Commercial Court in accordance with the domicile of the Business Actor by no later than 14 business days following the acceptance of a notice of decision of the Commission. If the party objects to the decision of the Commercial Court, it may file an application for cassation to the Supreme Court of the Republic of Indonesia within 14 business days following the acceptance of the notice of decision of the Commercial Court.
Has the authority ever blocked a proposed merger?
Has the authority ever imposed conditions on a proposed merger?
Yes. The ICC 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 Commission will impose on a proposed merger:
- the Commission 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 Commission 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 Commission 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 ICC will conduct a Phase II investigation if the 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 ICC 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?
Yes, we have.
Do you operate a leniency programme? Whom should potential applicants contact?
There is no leniency programme. However, the ICC has proposed 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 other concerned criminal bodies.
Are there any plans to reform the competition law?
Yes. The ICC is currently proposing the amendment of the law to the parliament.
When did the last review of the law occur?
The law was partially amended through the issuance of Omnibus Law on Job Creation (Law No. 11 of 2020).
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 ICC 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?
The ICC 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 listed 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
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?
Does the chief economist have the power to hire his or her own staff?
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.