Indonesia: Competition risks in the digital sector

Taking guidance from the EU Digital Markets Act

In brief

The Digital Markets Act (EU Regulation 2022/1925, "DMA") came into force on 1 November 2022, with the aim of promoting fair business practices in the digital industry in Europe. While the DMA itself may have no direct implication for Indonesia, the KPPU - Indonesia's competition authority - often refers to developments and thought-leadership on enforcement from other prominent jurisdictions, including the EU. Digital businesses operating in Indonesia may use the DMA as a navigation tool, and clients may find the practical risk mitigation tips set out below useful.


Contents

Identify the risks and how to mitigate them

The DMA provides guidance on how to identify gatekeepers or platforms that may have the benefit of scale and access to data, and those on which other business undertakings are dependent.

Although in Indonesia there is no equivalent of the DMA and there has been no public consultation on any proposed regulation with the same purpose, the currently applicable Indonesian Competition Law does have provisions that can be applied when there are unfair business practices in the digital sector.

Summarizing both the guidance from the DMA and the Indonesian Competition Law, here are some of the steps that businesses can take to avoid the risks: 

  • Data
    • Don't pass data collected by one business unit to another business unit (or affiliated business) that would result in an unfair advantage.
    • Provide transparency on the management of users' data and data sharing.
    • Consider appropriate safeguards when exchanging certain types of information, particularly to avoid inadvertently facilitating or participating in a (hub and spoke) cartel e.g. by sharing commercially sensitive information.
  • Parity clause(s)
    • Assess whether the parity clause(s) you would want to apply in your contract may result in any anticompetitive effect.
  • Privilege
    • When you have multiple business units (or affiliated businesses) whose services offered are complementary to each other, ensure fair competition throughout and arm's length cooperation.
    • Review cooperation with affiliated undertakings and tying-in (bundling) practices, as they could result in market foreclosure or other anticompetitive effects if you have a certain level of dominance.
  • Interlocking directorships
    • Review interlocking directorships, particularly between competing companies. They may have an anticompetitive effect, which can be an offense.
  • Choice
    • Users and business partners should not be deprived of their options to access and make use of competing products/services

Join our webinar

We will discuss the hot topics around antitrust and competition issues and enforcement in Indonesia in our webinar on 23 November 2022. Please join us in this interactive discussion. Click here for more details.

* * * * *

LOGO_Indonesia HHP Law Firm_Jakarta

© 2022 HHP Law Firm. All rights reserved. HHP Law Firm is a member firm of Baker & McKenzie International. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.

Contact Information

Copyright © 2022 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.