20 firms reported to antimonopoly commission

JAKARTA (JP): As many as 20 companies have been reported to the newly established anti-monopoly commission for alleged unfair business practices, a commission member has said.

Member of the Business Competition Supervisory Commission (KPPU), Pande Radja Silalahi, said the companies were involved in a wide range of businesses ranging from oil to food, from retail chain to medicine.

"Most of them are accused of practicing unfair business through, for example, vertical integration and price discrimination," he told The Jakarta Post on Tuesday.

KPPU is still collecting additional to ascertain as to whether the complaints merit further investigations, he said.

The 11-member KPPU has launched preliminary investigations of three companies, namely retail chain Indomart, American oil and gas firm PT Caltex Pacific Indonesia and a foreign tempeh and tofu importer.

It has been alleged that Indomart owner PT Indomarco only sells products from its parent company, the giant food producer Indofood. The company has denied the charge.

Caltex allegedly awarded contracts for a large pipeline project unfairly.

The foreign soybean firm has been accused by the Indonesian Tofu and Tempeh Cooperative of practicing price manipulation to undercut local producers.

KPPU's vice chairman Syamsul Maarif said on Monday that the commission would decide on Oct. 15 whether to proceed with the Caltex investigation.

The commission has 30 days from the time a complaint is received to investigate and determine if there is a valid case. If so, it must set up an investigative panel. The panel then has 60 to 90 days to investigate and make a judgment.

Indited companies are given 14 days to respond.

Pande said that the public had shown strong interest in the commission's role as reflected by the significant number of companies reported to the commission, which was only established in June.

He said the commission was fully aware of the public's high expectations to combat unfair business, but it could not promise quick results.

Peter Heermann, a law professor from the Bayreuth University in Germany, shared Pande's view, saying that it would require some time for the public and business community to properly understand the new law and for KPPU to develop their capabilities.

"You have to be patient before the law can work well. Please, give KPPU some time," he said, adding that KPPU has lots of things to do in order to better introduce and implement the regulations.

For example, KPPU should first prepare and publicize clear-cut guidelines that include legal definitions of some crucial terms used in the law, like monopolistic practice, dominant position, prohibited agreement and concentration of economic power, he said.

He said KPPU must, most of all, work in absolute transparency.

"It is highly recommended that KPPU make all of its decisions known to the public so that they can be checked by everybody," he said.

Faisal Basri, another KPPU member, said the commission pledged its commitment to transparency and fairness in all its activities.

"All of our work, as long as it is not confidential, such as the identity of people filing charges or documents in preliminary investigations, will be made known to the public," he said.

He said he was optimistic that KPPU, despite lacking a proper office, operational funds and experience, would eventually be able to do its job well.

KPPU was established in June by President Abdurrahman Wahid in compliance with the unfair business competition Law No. 5/1999, popularly called the anti-monopoly law. It became effective early this month after a six month grace period to allow companies time to review their current practices.

The law forbids individual companies from controlling more than 50 percent of a domestic market or two or three firms from controlling a combined 75 percent while deliberately inhibiting competitors from entering the market.

It also forbids practices of oligopoly, monopsony, price fixing, price discrimination, cartel, geographical designations of markets by suppliers, resale price maintenance and collusion in bidding. (cst)