Indonesia: Asia Pacific Competition Highlights, Q4 2020/2021

In brief

  • Competition law enforcement relaxed to aid economic recovery 
  • ICC ends 2020 with new management 

The ICC issued a new policy indicating it would not taking action against certain anti-competitive acts and late merger filings in view of the ongoing COVID-19 pandemic. The ICC also replaced its competition chief Kurnia Thoha with Kodrat Wibowo, who will serve until 2023. 


Contents

This update was published on 19 January 2021, as part of our quarterly newsletter, Asia Pacific Competition Highlights. Click here to access the full report, which covers the most notable antitrust developments across 11 Asia Pacific jurisdictions.

 

Competition law enforcement relaxed to aid economic recovery 

The ICC issued a new policy indicating it would not taking action against certain anti-competitive acts and late merger filings in view of the ongoing COVID-19 pandemic.

In response to the recession caused by the on-going COVID-19 pandemic, the Indonesian Competition Commission ("ICC") has issued a new regulation allowing businesses to request it not to take actions against certain conduct which otherwise would be regarded as potential violations of competition law. The categories of conduct eligible for this so-called relaxation of law enforcements are:

  • government procurement of medical goods and facilities to handle the COVID-19 pandemic;
  • provision of social welfare to society.
  • other acts and agreements for handling the COVID-19 pandemic; and
  • acts and agreements for increasing the economic capability of businesses to operate.

The ICC also provides that 30 extra working days shall be added to the timeline for merger filings so that the timeline becomes 60 working days since closing. 

Interested businesses are required to submit an application to the ICC to take advantage of this relaxation policy, which will be reviewed and decided upon within 14 days since its receipt by ICC. No further details are provided on the content requirements of such application, but according to the relevant ICC regulation, the ICC will take into account the benefit of applying this policy to public welfare in general, social fairness and avoid moral hazard in making its decision. Although there is no precedent to date, it appears clear that this policy is intended to help transactions which have wide economic impact, as opposed to all transactions.

 

ICC ends 2020 with new management 

The ICC also replaced its competition chief Kurnia Thoha with Kodrat Wibowo, who will serve until 2023.

The ICC typically makes changes to its leadership every five years. During his five-year tenure, Kurnia Thoha has shown willingness to take bold steps, most prominently by issuing a regulation in October 2019 where the ICC claimed the authority to review assets acquisitions, notwithstanding that an amendment to the Competition Law which would have explicitly introduced this power failed to pass. He is also known for promoting institution building within the ICC by pushing the ICC to adopt a long-term strategic plan. He has also been active in seeking to improve due process by introducing a new case handling procedure whose main feature is to limit the involvement of the Commissioners (who acted as judges of competition cases) in ICC investigations. Mr. Thoha also presided over the issuance of a new merger filing guide, which loosened market concentration standards and introduced simplifications to the merger filing process.

It is to be hoped that Mr. Kodrat will continue the ICC's current course of building its institutions. Some important work remains unfinished at the end of Mr. Thoha's tenure. The KPPU has yet to deliver on its long-term project of updating its guideline on individual articles of the Competition Law. The ICC is also still working on its inputs to a new guideline on the applications of administrative sanctions under the Competition Law, which the Government is due to issue in January 2021

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