The Indonesian Competition Authority announces end to relaxation of competition rules put in place over the COVID-19 pandemic

KPPU, the Indonesian Competition Authority, announced that the relaxation measures which were in place due to the pandemic will no longer be applicable as of 1 May 2022. Corporations carrying out business in Indonesia or related to the Indonesian market should buckle up for more rigorous enforcement by the KPPU. Earlier, the KPPU introduced a new KPPU Regulation on Competition Compliance Programme, which proposes a more lenient enforcement by the KPPU if a violation was found.

As one of the first competition authorities in Southeast Asia, the KPPU is also known as one of the most active. The KPPU hit a record high number of reports handled in 2021 at 205 reports of alleged violations, in comparison to 134 reports in 2019. The monumental change in the merger filing rules have also boosted merger filing numbers in 2021 to 233 filings (with 96 of which being entirely offshore transactions), in comparison to 124 filings in 2019.

This all happened during the pandemic, in which the KPPU applied Regulation No. 3 of 2020 on the relaxation measures on competition/antitrust enforcement, which has now been revoked through the issuance of Regulation No. 2 of 2022 and all of the relaxation measures will no longer be applicable as of 1 May 2022.

2021 was a busy year for the KPPU. In the recently published 2021 Annual Report, the KPPU disclosed their record-breaking caseloads and a shift in trends of competition/antitrust enforcement and advocacy.

Until 2019, the KPPU received more bid rigging-related reports from the public, which amounted to 62% of the reports and the remaining 38% is a mix of other types of infringement. In 2021, bid rigging-related reports from the public only amounted to 29% of the reports, thus making the other types of infringement at 71% of the total reports received by the KPPU throughout the year.

Failure-to-file for merger filing dominated the caseloads and decisions issued by the KPPU at 42% of all decisions rendered in 2021. At least two of the failure-to-file decisions issued by the KPPU in 2021 were related to an entirely offshore (foreign-to-foreign) transaction.

In 2021, the KPPU accepted the commitment of PT Angkasa Pura Iin the airport taxi business at Hasanuddin Airport, Makassar. This was not the first commitment decision issued by KPPU; the first one was PT Garuda Indonesia in September 2020, which did not end well. We would expect the number of commitment decisions to increase over time.

Next Steps

With the relaxation measures removed, we would expect the KPPU to be more active in carrying out enforcement action.

Earlier this year, the KPPU launched Regulation No. 1 of 2022, introducing a mechanism for corporations to register their compliance programme with the KPPU to be ratified or confirmed by the KPPU. Corporations with a ratified compliance programme may benefit from a more lenient enforcement, i.e. a lower fine, if an infringement is later found.

It might be beneficial for corporations to take this opportunity and make a proactive and positive remark before the KPPU.

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Dyah Paramita, The Indonesian Competition Authority announces end to relaxation of competition rules put in place over the COVID-19 pandemic, 6 April 2022, e-Competitions April 2022, Art. N° 106215

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