House OKs antimonopoly and unfair competition bill<\/p>\n
JAKARTA (JP): Individual companies holding more than 50
\npercent of the domestic market run the risk of maximum Rp 100
\nbillion (US$11.76 million) fines and jail terms for executives
\nunder the antimonopoly law passed by the legislature on Thursday.<\/p>\n
Designed to promote fair market competition, the law also bans
\ntwo or three companies from holding 75 percent of the market
\nbetween them.<\/p>\n
\"This law is not aimed at stamping out big businesses but to
\nmake the market a level playing field,\" Minister of Trade and
\nIndustry Rahardi Ramelan said at the House plenary session which
\nenacted the bill.<\/p>\n
The antimonopoly law -- the first piece of legislation
\nproposed at the House's initiative in more than 30 years -- will
\ncome into force 18 months after its ratification by President
\nB.J. Habibie.<\/p>\n
Also declared illegal is a company holding a market share of
\n50 percent when the majority shareholder also controls other
\nfirms active in the same sector.<\/p>\n
The law prohibits vertical restrictions on competition and any
\ndeals or contracts allowing for oligopolies, monopsonies, price
\nfixing, cartels, trusts and geographical designations of markets
\nbetween suppliers.<\/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
The law's enforcement will be overseen by the independent
\nBusiness Competition Supervisory Commission, whose members will
\nbe appointed by the President following prior approval from the
\nHouse.<\/p>\n
Rahardi stated the law would not be the sole determinant in
\ndeciding whether a company held a monopoly because its practices
\nwould also be used as a yardstick.<\/p>\n
\"Any practices meant to restrict new entries to the market
\nwill be considered anticompetitive.\"<\/p>\n
A company would not necessarily be sanctioned if the
\nindependent commission determined the 50 percent market share was
\nfounded on efficiency and the company did not abuse its dominant
\nposition to restrict new market entrants, Rahardi said.<\/p>\n
The commission will have the authority to evaluate business
\nagreements and activities for indications of monopolistic
\npractices, and to take action against violators.<\/p>\n
\"If one company or a group of companies holds a market share
\nof more than 50 percent, then it could be suspect and considered
\nto have a monopoly,\" Rahardi said. \"But the final verdict will
\ndepend on the independent commission's investigations of the
\nbehavior of these companies.\"<\/p>\n
Under the law, which also regulates mergers and acquisitions,
\na market share will be determined by sales value rather than
\nvolume.<\/p>\n
Notably exempt from the law are the production and marketing
\nof goods and services vital to public welfare and state
\ncompanies.<\/p>\n
Rahardi said the law would help create healthy competition in
\nthe production sector, enabling consumers to get high quality
\nproducts at \"competitive... prices\".<\/p>\n
Rambe Kamarul Zaman, head of the House's special commission in
\ncharge of deliberating the antimonopoly bill, said the scope of
\nthe draft legislation was expanded to cover not only monopolistic
\nor cartel-like practices, but also all other deals that could
\nhamper fair competition. (gis)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/house-oks-antimonopoly-and-unfair-competition-bill-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}