Antimonopoly law applicable: YLKI

JAKARTA (JP): Analysts said on Thursday the new antimonopoly law, despite its many shortcomings, should be welcomed because it was badly needed to ensure fair competition in the market.

"Although the law still has many loopholes it is still applicable," said deputy chairman of the Indonesian Consumers Foundation (YLKI) Agus Pambagio.

He acknowledged that the law was far from perfect but its implementation would still be able to protect small companies from unfair competition from the bigger players.

The government's plan to enact the newly passed consumer protection law will complement the implementation of the antimonopoly law, he said.

President director of CS Consultant Gary W. Christian said deficiencies were only to be expected in the law.

"In fact, in terms of statutory law, the Indonesian antimonopoly law is far more detailed than the U.S. statutes on the subject."

He said it would take years to improve the law in order to prevent monopolies and other unfair competition practices, but it could be done in line with good implementation.

"The United States has adopted an antimonopoly law since 1890 and, after several revisions, the current law is still not perfect. There are several cases that still cannot be settled," he said.

"But we never stop improving the law."

The antimonopoly and unfair competition law, passed by the House of Representatives in February and ratified by President B.J. Habibie on March 5, includes the prohibition of a company from holding more than 50 percent of the domestic market. Violators face Rp 100 billion (US$11.76 million) in fines and six-month jail terms for the executives.

The enforcement of the law, which will become effective 18 months after ratification by the President, will be overseen by a Business Competition Supervisory Commission, whose members will be appointed by the President following prior approval from the House.

The law stipulates, however, that a company will not necessarily be sanctioned if the independent commission determines that the more than 50 percent market share was gained due to efficiency and the company did not abuse its dominant position to restrict new market entrants.

Economist Sri Mulyani Indrawati said that despite its weaknesses, an antimonopoly law would give more business assurance to companies operating in Indonesia.

The law, she said, provided an assurance to all parties who wanted to enter business.

"A certainty in doing business is one of the key factors needed to attract foreign investors to the country. And, previously, it fully depended on what the authorities wanted," she said. (gis)