Court sides with Garuda against KPPU

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.