On March 24, 2022, the Indonesia Competition Supervisory Commission (Komisi Pengawas Persaingan Usaha or “KPPU”) issued its first regulation in 2022 on Competition Compliance Program (“Reg. 1/2022”). As its title implies, Reg. 1/2022 aims to improve compliance of businesses towards the compliance regulatory regime in order to create a healthier competition ecosystem in the market.
Essentially, Reg. 1/2022 encourages businesses to develop a “Competition Compliance Program”, namely series of programs, activities and guidelines codified into a document that is integrated into a business'/companies' policies.
We set out below key provisions under Reg. 1/2022.
- Contents of Competition Compliance Program
Businesses may now prepare, draft and register their Competition Compliance Programs to the KPPU, which shall contain at least:
- code of ethics;
- Competition Compliance Guidelines; and
- training, socializations and other activities done in the implementation of the Competition Compliance Program
The Competition Compliance Program itself may be adjusted based on the needs of the business and must be adapted to accommodate the industry that the business operates in. It is also important to note that while this Competition Compliance Program is not mandatory, it does reward participation with certain benefits, which will be further described below.
- Registration and Reporting
Businesses with existing Competition Compliance Programs and those without may register such Programs to the KPPU. Upon approval from the KPPU, the Competition Compliance Program shall be valid for 5 (five) years.
As mentioned above, registration of a Competition Compliance Program is optional. However, upon registration, businesses are also obligated to report the implementation of the Competition Compliance Program.
The KPPU will then evaluate the implementation report, and may give certain recommendations towards the Competition Compliance Program of a Business. Reg. 1/2022 does not stipulate the frequency of these reports, nor does it prescribe any sanctions towards non-compliance towards the reporting obligations/KPPU recommendations.
- Benefits
Participation in the Competition Compliance Program rewards businesses with certain intangible benefits, such as improved trust from consumers/investors, good reputation of the business, etc. However, Article 5 (4) of Reg. 1/2022 provides that businesses with registered Competition Compliance Programs may receive reduced sanctions in the event that it is found to be in violation of competition regulations. However, the criteria and amount of reduction is not specified.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
