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W&P Newsletter – Highlights of Indonesia’s New Antitrust Rules

The Indonesian Government and the Business Competition Supervisory Commission (“KPPU”) issued Government Regulation No. 44 of 2021 (“GR 44/2021”) and KPPU Regulation No. 2 of 2021 (“KPPUR 2/2021”), both setting out detailed implementing provisions of the Indonesian Antitrust Law (“IAL”).

GR 44/2021 and KPPUR 2/2021 are effective as of 2 February 2021 and 31 May 2021, respectively. Below is a notable analysis of GR 44/2021 and KPPUR 2/2021:

  • Longer Period for Adjudicating Objections against KPPU’s Decision. The authority to adjudicate objections filed by business practitioners against the KPPU’s decision has been shifted from the district court to the commercial court. GR 44/2021 provides a longer period for the commercial court to render its decision when adjudicating the KPPU’s decision, from previously a maximum period of 30 days to a maximum period of 12 months. On one hand, the extended maximum period shows the government’s awareness of the logistic limitations of commercial courts in Indonesia. On the other hand, from the business practitioners’ perspective, this provides them with more time to prepare and present their arguments to the commercial court. In addition, the new regulations also require businesses to provide a bank guarantee whenever they file an objection or cassation against the KPPU’s decision, within 14 business days after receiving notification of the KPPU’s decision; otherwise, they will be deemed to accept the KPPU’s decision. Considering the tight deadline, any business intending to appeal against the KPPU’s decision should prepare the bank guarantee in advance before the KPPU renders its decision. According to Article 11 paragraph (2) of KPPUR 2/2021, the amount of bank guarantee to be provided by a business is up to a maximum of 20% of the total fine levied by the KPPU in its decision. In that connection, the KPPU is given broad power to decide the amount thereof on a case-by-case basis.
  • Amendment to Administrative Sanction Calculation Methods. GR 44/2021 and KPPUR 2/2021 amend the fine threshold and calculation method of the administrative sanction for each violation of the IAL from previously IDR 1 billion – IDR 25 billion to either (a) 50% of the perpetrator’s net profit gained from the business or (b) 10% of the perpetrator’s total sales (before taxes or other levies) in the relevant market (whichever is higher) – both calculated during the violation period.
  • KPPU’s Consideration in Determining Amounts of Fines. KPPUR 2/2021 requires the following elements to be taken into account when the KPPU assesses the amounts of fines to be imposed on perpetrators: (a) the negative impact resulting from the violation (the criteria therefor will be set in a separate KPPU regulation), (b) the length of the violation period, (c) the extenuating factors (such as the voluntary remediation actions taken by the perpetrator), (d) the aggravating factors (such as repeated violations), and (e) the financial capacity of the business owner to pay the sanction (i.e., whether or not the imposition of fines will adversely affect the perpetrator’s ability to continue its business operations).
  • More Relaxed Fine Payment Arrangements. Upon the written request of a business to the KPPU, the KPPU may approve the payment of fines in instalments up to a maximum period of 36 months, provided that the business must provide the KPPU with a sufficient guarantee, which may take the forms of insurance, bank guarantees, surety bonds, security interests, or other kinds of guarantees.

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