Bapepam, KPPU agree to fight monopolies

Zakki Hakim, The Jakarta Post, Jakarta

The Business Competition Supervisory Commission (KPPU) and the Capital Market Supervisory Agency (Bapepam) signed a memorandum of understanding (MoU) on Thursday to cooperate in curbing unfair business competition in the capital market.

The agreement is aimed at ensuring that share acquisitions and mergers will not lead to the creation of monopolies in local economic sectors.

Bapepam chairman Herwidayatmo said that this was crucial for helping to improve the business climate at home.

The capital market law alone cannot prevent companies from creating monopolies or engaging in other unfair business practices at the expense of the general public, he explained

KPPU chairman Syamsul Maarif said that acquisitions or mergers should lead only to improved business efficiency, not market domination by one company.

According to the capital market law, listed companies are not allowed to undertake mergers that could lead to monopolies. However, the law stipulates that there has to be an independent arbiter to decide whether a merger would create such a monopoly.

The KPPU is expected to play such a role.

The KPPU is tasked by Antimonopoly Law No. 5/1999 with gradually establishing fairer competition in the country and wiping out the monopolistic practices that have tainted the country's business world for decades.