Legal Literacy - This article discusses leniency program as a key in tackling cartels in business competition in Indonesia.

Indonesia still regulates monopolistic practices and unfair business competition regulated through Law Number 5 of 1999. Various regulations to prevent losses experienced by business actors and consumer losses, the Business Competition Supervisory Commission will examine and impose sanctions if proven to have engaged in unfair business competition. Many actions by business actors occur in order to gain profits and low competition in the market through price fixing and cartels. According to Article 5 paragraphs (1) and (2) of Law Number 5 of 1999, it is stated;

  1. Actor business is prohibited from making agreements with competing business actors to set prices for a good and or service that must be paid by consumers or customers in the same relevant market
  2. The provisions referred to in paragraph (1) do not apply to:
    • An agreement made in a joint venture; or
    • An agreement based on applicable laws.

How Does a Cartel Scheme Occur in Indonesia?

The law has regulated the prohibition of price fixing (price fixing) but such actions still often occur which potentially harm consumers due to market mechanisms (market mechanism). In fact, the Government is only a regulator and cannot enter the market mechanism, but the role of supervising business competition by the government must be carried out in order to minimize unfair actions in the market.

Anti-competitive actions can be categorized into two modes, namely the collusion mode and the unilateral mode or unilateral actions by business actors. Collusion occurs between two or more business actors who make agreements that are restrictive, for example price fixing (price fixing), market allocation (market allocation), and bid rigging (bid rigging) . In such actions, both price fixing, market allocation, and bid rigging can be categorized as cartel actions in the market. According to Article 11 of Law Number 5 of 1999 states:

Business actors are prohibited from making agreements with their competing business actors, which intend to influence prices by regulating the production and or marketing of a good and or service, which may result in monopolistic practices and or unfair business competition