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Reimagining Competition Law in Indonesia After COVID-19

Competition Law

All countries are starting to struggle to revive their economy so that it remains stable after the Coronavirus Disease (“COVID-19”) pandemic hit around the world. Indonesia is one of the countries seriously affected by the pandemic, and now is planning to create economic stability for business actors ranging from large and medium business actors to Micro, Small and Medium Enterprises (“MSME”). The Indonesian government has made efforts to gradually rebuild the Indonesian economy to provide relief or convenience for business actors in rebuilding their business.

The Indonesia Competition Commission (Komisi Pengawas Persaingan Usaha, “KPPU”) is one of the government institutions that provide relief for the business sector in Indonesia. In 2020, KPPU issued Regulation of the Business Competition Supervisory Commission of the Republic of Indonesia Number 3 of 2020 concerning Relaxation of Law Enforcement of Monopolistic Practices and Unfair Business Competition, and Implementation of Partnerships to Support the National Economic Recovery Program (“RBCSC 3/2020”). The purpose of RBCSC 3/2020 is contained in Article 3, which aims to support the economic recovery program by protecting, maintaining, and improving the economic capacity of Business actors in running their business.

Competition Law

About KPPU 

KPPU is a Commission Institution established based on Law 5/1999 on Monopolistic Practices and Unfair Business Competition (“Law 5/1999”). One of the KPPU’s tasks is to impose sanctions on business actors through the competition law enforcement process, which previously became an important part of efforts to assist the Government of Indonesia in supervising business competition in Indonesia. From 2002 to 2019, out of a total of 181 (one hundred and eighty-one) case decisions that were processed in the District Court, around 58.5% (fifty-eight point five per cent) was won by KPPU, while out of a total of 145 (one hundred and forty-five) decisions at the Supreme Court, around 70.3% (seventy point three per cent) was won by KPPU. From a total of 37 (thirty-seven) judicial review decisions, KPPU won more than 91.8% (ninety-one point eight) of cases based on RBCSC 2/2020, which means a total more than 181 (one hundred and eighty-one) business actors violating Law 5/1999 had received administrative sanctions. These violations are certainly very detrimental not only to the public but also to emerging business actors who desire to enter the market.

KPPU Law Enforcement Process 

The law enforcement process within the KPPU is specifically regulated in Regulation of Business Competition Commission Number 1 of 2019 on Procedures for Handling Cases of Monopolistic Practices and Unfair Business Competition (“RBCSC 1/2019”). Article 2 explains that the sources of cases to be handled by KPPU are from report and initiative.


  1. Report: Individuals or legal entities can report to KPPU if a violation of Law 5/2019 is reasonably suspected to have occured.
  2. Initiative: Initiative is an examination of business actors carried out if there is an alleged violation of the law even without a report.


KPPU is assisted by the KPPU Secretariat in initiating investigations into alleged business competition violations. Article 17 stipulates that if the report or initiative for an alleged violation of the law meets the requirements for follow-up, the KPPU Investigator will proceed to the investigation stage to obtain sufficient evidence, clarity and completeness of the alleged violation. Furthermore, the investigation period for an alleged violation of the law is 60 (sixty) working days and can be extended based on the decision of the Coordination Meeting as regulated in Article 16. If the investigation report on the violation case is approved by the KPPU, the case will then be continued to the Commission Council Session, the stages of which are as follows:


    1. Preliminary examination;
    2. Behavior Change;(If the suspected company admits the violation)
    3. Behavior Change Decision;
    4. Determination of Behavior Change;
    5. Follow-up Examination; (If suspected company (defendant) denies the violation, or the Investigator reports to Commissioner that there are no behaviour changes from the suspected company)
    6. Deliberation of the Commission Council;
    7. Reading of the Commission’s Decision; and
    8. Implementation of the Commission’s Decision 

In the event after going through the trial process at KPPU, the business actor is found guilty by the Commission Council, the business actor may file an objection after receiving notification of the decision through the Commercial Court as stated in Article 44 of Law 5 1999, which has been amended by Law Number 11 of 2020 on Job Creation Law  (“Ciptaker Law”). Then, if there is an objection to the decision of the Commercial Court, the business actor may submit an appeal to the Supreme Court of the Republic of Indonesia within 14 (fourteen) working days after receiving notification of the decision of the Commercial Court.

Competition Law

Amount of Fine

Regardless of the changes to several provisions relating to sanctions in the form of fine, KPPU is still allowed to impose a minimum fine of Rp. 1,000,000,000 (one billion Rupiah) on the company violating the law. However, this amount is not absolute as stated in Article 12 of Government Regulation Number 44 of 2021 concerning Implementation of Prohibition of Monopolistic Practices and Unfair Business Competition that administrative sanctions in the form of fine as referred to in Article 6 paragraph (2) letter g are only the basic fine. The imposition of administrative sanctions in the form of fine by the Commission is carried out based on the following provisions:

  1. a maximum of 50% (fifty per cent) of the net profit earned by the Business Actor in the relevant market during the period of violation of the law; or
  2. a maximum of 10% (ten per cent) of the total sales in the relevant market during the period of violation of the law.

The above new provisions regarding the amount of fine are the result of a significant change, where previously the amount of fine was set at a maximum of Rp 25,000,000,000 (twenty-five billion rupiahs). In addition, the provisions regarding the amount of fine for Late Notification of Mergers and Acquisitions remain the same.

The right company policy in determining the direction of the business is very crucial for the company’s compliance and consequently for the smooth operation of their business. Business actors must consciously run their business in a way that avoids unfair business competition behaviour. 


Realizing Healthy Business Competition in Indonesia

The COVID-19 pandemic certainly poses formidable challenges to survive for businesses in many sectors, and KPPU remains tasked with overseeing fair business competition in an effort to support the Government in creating a conducive economy for healthy business activities. Consequently, it is crucial for business actors to reorganize their business in an appropriate corridor i.e., complying with fair business competition regulations. Therefore, as Legal Counsels who help companies in developing and running their business safely, we Advocates of ADCO Law assist our clients in keeping their business on the right track and provide the necessary input anytime the clients potentially violate Law 5/1999.



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Should you have more queries regarding to this matter, please do not hesitate to contact us.


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Disclaimer: This article has been prepared for scientific reading and marketing purposes only from the ADCO Law. Furthermore, all the writings contained therein do not constitute the formal legal opinion of ADCO Law. Therefore, ADCO Law should be hold harmless and/or cannot be held responsible for anything from the parties who use this writing outside of what is the purpose of the ADCO Law.