Answer ... There is no clear definition of a ‘cartel’ under the Competition Law. However, in implementing the Competition Law, the KPPU has issued several guidelines based on which, along with other factors, the existence of a cartel is determined:
- KPPU Regulation 2/2010 on Bid Rigging (‘Article 22 Guideline’);
- KPPU Regulation 4/2010 on Restrictions on Output and Marketing (‘Article 11 Guideline’); and
- KPPU Regulation 4/2011 on Price Fixing (‘Article 5 Guideline’).
Based on the Article 11 Guideline, the KPPU defines cartel behaviour as an agreement entered into or conduct undertaken by competitors that may restrict competition on the market or cause inefficiencies in resource allocation resulting in deadweight loss that harms consumers. In addition, under the Article 11 Guideline, an agreement between competitors to coordinate their activities in order to control the quantity and price of goods and services to earn profits above the reasonable level is also considered to be a cartel. Thus, Article 11 and its guideline adopt the rule of reason approach.
This approach is also adopted in Article 7 on predatory pricing, Article 9 on market allocation, Article 10 on boycotts and Article 22 on bid rigging. A distinct feature of Article 22 of the Competition Law is that it captures not only horizontal collusion, but also the vertical aspect of bid rigging. Meanwhile, unlike the other cartel-related provisions that adopt the rule of reason approach, Article 5 – which regulates price fixing – is a per se provision.
Answer ... The cartel offences cover horizontal restrictive agreements – that is, agreements relating to:
- price fixing;
- production arrangements;
- market allocation;
- group boycotts;
- bid rigging; and
- other arrangements, conspiracies or concerted practices that may restrict competition on the market or cause harm to consumers.
Answer ... With reference to the applicable regulations and types of sanctions that can be imposed, the liability arising from cartel offences may take the form of administrative, civil or criminal liabilities (for civil and criminal liability, see questions 1.1, 6.1 and 6.2).
The Competition Law provides the KPPU with administrative power only in adjudicating a competition case, empowering the KPPU to:
- annul an agreement, whether completely or partially;
- impose a fine of between IDR 1 billion and IDR 25 billion on each undertaking; and
- order an undertaking to compensate for damages arising from its anti-competitive or unfair practices.
Even though it is not explicitly stipulated in the ICL, in practice, KPPU has also imposed the following sanctions in bid-rigging cases:
- prohibition for undertaking or individual from participating in public procurements for a period of time, which usually ranges from 1 to 2 years (debarment);
- annulment of the result of a tender process;
- inclusion of undertaking into KPPU’s publicly available blacklist.
Answer ... Under Article 1(5) of the Competition Law, an ‘undertaking’ is defined as any individual or business enterprise, incorporated or otherwise, that is established and domiciled or conducts activity within the territory of Indonesia, whether individually or jointly through an agreement, in the form of various operations in the relevant economic sector. Therefore, the enforcement of cartels under the Competition Law relates to both individuals and companies.
Answer ... The Competition Law applies to undertakings, which is defined under Article 1(5) as any individual or business enterprise that is established and domiciled or conducts activity within the territory of Indonesia (see question 2.4). Referring to such definition, the KPPU is of the view that the Competition Law generally applies to any conduct that occurs outside Indonesia if it has a detrimental impact on the Indonesian market. The KPPU may prosecute a foreign company if such foreign company has a presence, whether direct or indirect, in the Indonesian market by enforcing its decision against the local subsidiary or affiliate.
Answer ... There is no precedent on the extraterritorial application of the current Competition Law in relation to cartel cases. However, the KPPU is of the view that the Competition Law generally applies to any conduct occurring outside Indonesia if the reported party is established and domiciled or has a direct or indirect subsidiary in Indonesia (see question 2.5).
Answer ... The Competition Law does not prescribe any statute of limitations to prosecute cartel offences.