Competition Law: New Regulations

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On 2 February, the Government introduced new competition law regulations (the Regulations*) – in accordance with the Job Creation Law.** The Regulations amend two important areas of the Antimonopoly Law***; these are the appeals procedure and sanctions.

Appeals Procedure

The new Regulations make significant changes to the procedures by which an entity can appeal against a decision of Indonesia’s Competition Commission (ICC). Appeals will now be made in the commercial court rather than a district court. The Regulations also significantly extend the period during which the court may consider a case – from 30 days to a maximum of 12 months.

The Regulations introduce a further appeals process; an appeal may be filed with the Supreme Court against a Commercial Court decision within 14 days of that decision.
The Regulations also introduce the requirement to pay at least 20% in a form of bank guarantee of any fine imposed by the ICC within 14 days after the ICC decision has been made.

Sanctions

The Regulations introduce a framework for the imposition of sanctions on businesses that breach competition rules. ICC must now consider a number of factors when determining sanctions for competition rules breaches. These factors include the:

  • degree of breach of the law and/or the impact of the breach; and/or
  • impact of any sanctions on business continuity.

Further, the Regulations require that any sanctions handed down by ICC must be accompanied by detailed and clear explanation.

The Regulations update the cap on fines that may be imposed for breach of competition law, which was previously IDR 25 billion. Under the new Regulations, fines are calculated for the period of the breach, measured in half yearly increments, and are capped at either:

  • maximum 50% of net profit; or
  • maximum 10% of total sales.

The ICC will determine which measurement to use depending on the type of breach and any mitigating/aggravating factors.

Fines for criminal breaches of the competition law have increased to IDR 5 billion or up to one year in prison.
All ICC cases that have not yet been decided will be decided in compliance with the new Regulations.

* Government Regulation No. 44/2021 on the Implementation of Prohibition of Monopolistic Practices and Unfair Business Competition.

** Law No. 11/2021 on Job Creation Law.

*** Law No. 5/1999 on The Prohibition of Monopolistic Practices and Unfair Business Competition.