Court sides with Garuda against KPPU

The Jakarta Post, Jakarta

The Central Jakarta District Court ruled on Thursday in favor of PT Garuda Indonesia in its dispute with the country's monopoly watchdog, which accused the national flag carrier of preventing fair competition.

Garuda spokesperson Pudjobroto said in a press statement the court had dismissed the charges filed by the Business Competition Control Commission (KPPU).

In August, the KPPU said the airline was guilty of monopolistic practices in its issuing of domestic air tickets and should be fined Rp 1 billion (US$111,869).

The KPPU opened the investigation following a complaint filed by an unnamed computerized reservation system (CRS) provider and reached its decision after questioning 17 witnesses.

The provider accused Garuda of hampering fair competition in the domestic ticket reservation business with its exclusive agreement with its subsidiary, PT Abacus Indonesia, which supplies an international CRS called Abacus.

Garuda was accused of giving the firm exclusive rights to distribute its domestic flight tickets, while for international flights the company opened its ticket distribution to all CRS companies.

However, Garuda said it had been using the Abacus system since 1995 as it was the only CRS available in the country.

The airline also said its partnership with Abacus was part of its efficiency measures.

Garuda said it was a CRS consumer and thus had the right to choose a CRS provider that offered the most competitive price and quality.

The Antimonopoly Law passed in 1999 stipulates that a business may not make deals for the purpose of controlling production or services, which results in unfair competition and/or violates the rights of consumers.

The KPPU, which was established under the same law, has the authority to investigate businesses suspected of engaging in unfair business practices and imposing sanctions on them.

The KPPU suffered a blow last year in its efforts to maintain fair business competition in the country, when the courts overturned a decision by the commission against a number of parties allegedly involved in irregularities in the sale of the government's 72 percent stake in automaker PT Indomobil.