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