Antimonopoly commission to be formed in October<\/p>\n
JAKARTA (JP): An independent supervisory commission which will
\noversee the implementation of the newly introduced antimonopoly
\nlaw will be formed before the change in the current government,
\na senior official said here on Wednesday.<\/p>\n
Secretary general of the Ministry of Industry and Trade
\nMuchtar said the government would soon submit the names of the
\nBusiness Competition Supervisory Commission (KPPU) members to the
\nHouse of Representatives for approval.<\/p>\n
\"We expect the establishment of the commission will be
\napproved by the President in October at the latest so that
\nregulations for the implementation of the law could soon be
\nformulated,\" he told a seminar on the newly introduced
\nantimonopoly law.<\/p>\n
According to the new law, the commission will have the
\nauthority to monitor business agreements and activities in the
\ncountry and will also have the power to probe the deals if there
\nare indications of monopolistic practices.<\/p>\n
Muchtar declined to reveal the names of the proposed
\ncommission members, but confirmed that several business people
\nwould be included in the commission.<\/p>\n
\"Of course, because it's an independent commission, all
\nbusinessmen must give up their positions as commissioners,
\ndirectors or executives in their companies while serving the
\ncommission during the five-year period,\" he said.<\/p>\n
He said it was very important that the commission was
\nestablished this year because it should finish the guidelines
\nregulation before the law itself became effective on March next
\nyear.<\/p>\n
The current cabinet will end as soon as the new president,
\nwhich will be elected during the general meeting of the People's
\nConsultative Assembly some time in November.<\/p>\n
The Antimonopoly and Unfair Competition Law 5\/1999, passed by
\nthe House of Representatives in February, is the country's first
\nlegislation to directly deal with monopolistic and other unfair
\nbusiness practices.<\/p>\n
The law, for example, prohibits an individual company from
\nholding more than 50 percent of the domestic market and two or
\nthree companies from holding 75 percent of the market between
\nthem. A market share is determined by sales value rather than
\nvolume.<\/p>\n
The law, which regulates mergers and acquisitions, also
\nprohibits vertical restrictions on competition and any deals or
\ncontracts allowing for oligopolies, monopsonies, price fixing,
\ncartels, trusts and geographical designations of markets between
\nsuppliers.<\/p>\n
Oligopoly occurs when a few large producers of similar
\nproducts dominate the market; a monopsony is a situation where
\nthere is a single consumer of the goods produced.<\/p>\n
Notably exempt from the law is the production and marketing of
\ngoods and services vital to public welfare and state companies.<\/p>\n
Business individuals or companies founded guilty of violating
\nthe law will face between Rp 1 billion (US$133,333) and Rp 100
\nbillion fines and between three and six months jail terms.<\/p>\n
Muchtar said the final verdict on an allegation of unfair
\ncompetition conducted by a particular company would depend on the
\ncommission's investigations of the company's behavior.<\/p>\n
\"Beware that any practices meant to restrict new entries to
\nthe market will also be considered anticompetitive,\" he said.<\/p>\n
Muchtar said whether the law could be successfully applied
\nwould very much depend on the way the commission exercised their
\nrights and responsibilities. (cst)<\/p>",
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