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Results: 4 Answers
Merger Control
4.
Review process
4.1
What is the review process and what is the timetable for that process?
 
Indonesia
GR 57/2010 provides that the maximum period for the Business Competition Supervisory Commission (KPPU) to complete its review is 90 working days.

In a mandatory post-merger notification, there is only one phase of review, which involves the following steps:

  • The relevant party is obliged to notify the KPPU within 30 working days of the transaction becoming legally effective. The KPPU will commence its review upon completion of the notification form and the supporting documents.
  • If the KPPU considers the notification to be incomplete, the relevant party must submit the outstanding information or documents no later than 30 working days after the initial submission date; otherwise, the KPPU may consider the notification not to have been made and impose sanctions for failure to notify.
  • Once all requirements are deemed to have been met, the KPPU will begin its review, which will last a maximum of 90 working days, before issuing an opinion. The tests are similar to those implemented in a voluntary pre-merger consultation.

In a pre-merger consultation, the review is usually performed in two phases: a preliminary evaluation and a comprehensive evaluation.

The steps involved in a Phase I (preliminary) evaluation are as follows:

  • The KPPU will define the relevant market or markets and measure market concentration. If the concentration caused by the merger raises no competition concerns, the KPPU will issue its opinion without any further review.
  • This process will last no longer than 30 working days.

The steps involved in a Phase II (comprehensive) evaluation are as follows:

  • The KPPU will undertake a comprehensive evaluation if it finds that the proposed transaction may have potential anti-competitive effects during Phase I.
  • The comprehensive evaluation will last no longer than 60 working days following the end of Phase I.
  • The KPPU will generally examine entry barriers, possible anti-competitive effects, efficiencies put forward by the parties and possible failing firm defences.
For more information about this answer please contact: Fahrul S. Yusuf from SSEK Indonesian Legal Consultants
4.2
Are there any formal or informal ways of accelerating the timetable for review? Can the authority suspend the timetable for review?
 
Indonesia
The 90-day period will start only after KPPU has formally acknowledged that the documents submitted are complete. This can prolong the entire process, as this will depend mostly on how fast the applicant can complete all filing documents.

For more information about this answer please contact: Fahrul S. Yusuf from SSEK Indonesian Legal Consultants
4.3
Is there a simplified review process? If so, in what circumstances will it apply?
 
Indonesia
No simplified process is available for mandatory post-merger notification. In the pre-merger consultation, the KPPU will not proceed with Phase II if the concentration caused by the merger raises no competition concerns, in which case the KPPU will issue its opinion without any further review.

For more information about this answer please contact: Fahrul S. Yusuf from SSEK Indonesian Legal Consultants
4.4
To what extent will the authority cooperate with its counterparts in other jurisdictions during the review process?
 
Indonesia
The current regulatory regime does not provide for any circumstances in which the KPPU may contact or cooperate with its counterparts in other jurisdictions during the review process.

For more information about this answer please contact: Fahrul S. Yusuf from SSEK Indonesian Legal Consultants
4.5
What information-gathering powers does the authority have during the review process?
 
Indonesia
During the review process, the KPPU may collect data and information from various interested parties, such as competitors, consumers, governmental authorities and any other parties that the KPPU deems appropriate.

For more information about this answer please contact: Fahrul S. Yusuf from SSEK Indonesian Legal Consultants
4.6
Is there an opportunity for third parties to participate in the review process?
 
Indonesia
Generally speaking, there is no opportunity for third parties to participate in the review process, other than at the KPPU’s invitation during the information-gathering stage, as described in question 4.5.

For more information about this answer please contact: Fahrul S. Yusuf from SSEK Indonesian Legal Consultants
4.7
In cross-border transactions, is a local carve-out possible to avoid delaying closing while the review is ongoing?
 
Indonesia
As discussed in question 3.8, the merger control regime in Indonesia is based on post-merger notification and there should be no delay to closing. Closing may be delayed if the parties opt to conduct a voluntary pre-merger consultation and would like to obtain the KPPU’s decision on the merger before closing the transaction.

For more information about this answer please contact: Fahrul S. Yusuf from SSEK Indonesian Legal Consultants
4.8
What substantive test will the authority apply in reviewing the transaction? Does this test vary depending on sector?
 
Indonesia
GR 57/2010 and the corresponding KPPU Regulation set out the substantive tests that will be applied by the KPPU when reviewing a merger. The KPPU’s review will involve, at the very least, an evaluation of:

  • market concentration;
  • barriers to market entry;
  • potential anti-competitive behaviour;
  • efficiencies following the merger;
  • the planned avoidance of bankruptcy of one of the parties to the transaction; and
  • any other reason that may be regulated in a future KPPU rule.

The KPPU will begin its assessment and evaluation by measuring the market concentration following the merger. The KPPU usually uses the Herfindahl–Hirschman Index (HHI) to measure the concentration. Where data is not available to calculate the HHI, the KPPU will use another method, such as the concentration ratio.

In general, the KPPU divides the post-merger HHI into two spectrums:

  • Spectrum I (low concentration, with a HHI below 1,800); and
  • Spectrum II (high concentration, with a HHI above 1,800).

The KPPU will identify competition concerns only if the post-transaction HHI falls within Spectrum II and the difference between pre-merger and post-merger concentration exceeds 150 points.

This test applies across all sectors.

For more information about this answer please contact: Fahrul S. Yusuf from SSEK Indonesian Legal Consultants
4.9
Does a different substantive test apply to joint ventures?
 
Indonesia
No other substantive test is applicable to joint ventures, since the establishment of a joint venture is not a notifiable transaction.

For more information about this answer please contact: Fahrul S. Yusuf from SSEK Indonesian Legal Consultants
4.10
What theories of harm will the authority consider when reviewing the transaction? Will the authority consider any non-competition related issues (eg, labour or social issues)?
 
Indonesia
Other than the considerations in question 4.8, the KPPU generally does not take into account other issues not relating to competition.

For more information about this answer please contact: Fahrul S. Yusuf from SSEK Indonesian Legal Consultants