Garuda fined Rp 1b for violating anti-monopoly law
Garuda fined Rp 1b for violating anti-monopoly law
Evi Mariani, The Jakarta Post, Jakarta
State-owned flag carrier PT Garuda Indonesia was guilty of
monopolistic practices in issuing domestic air tickets and must
pay a Rp 1 billion (US$117,000) fine, the country's antimonopoly
watchdog ruled Monday.
Garuda's spokesperson Pujobroto said it had not yet received a
copy of the verdict and could not comment.
"Upon receiving the copy, PT Garuda Indonesia will study the
verdict and will decide on any necessary legal action."
Business Competition Control Commission (KPPU) member Mohammad
Iqbal, who led the investigation, told The Jakarta Post that it
launched the probe following a complaint filed by a unnamed
computerized reservation system (CRS) provider.
The provider accused Garuda of hampering fair competition in
the domestic ticket reservation business with its exclusive
agreement with its subsidiary PT Abacus Indonesia.
"Garuda was proven to have given PT Abacus Indonesia an
exclusive right to distribute its domestic flight tickets," he
said. "Meanwhile, for Garuda's international flights, the company
opens its ticket distribution to all CRS companies."
Iqbal said it reached its decision after summoning 17
witnesses.
"Most of the 17 witnesses we summoned were travel agencies.
They complained about the practice, saying that as a result of
the exclusive right they had no choice other than to use the
system offered by Abacus to process domestic tickets."
Iqbal said that even Abacus itself, which is 95 percent
controlled by Garuda, complained about the arrangement because
Garuda never paid it any reservation fees.
The Antimonopoly and Unfair Competition Law, passed in 1999,
states that a business is forbidden from making deals that aim to
control production or services, resulting in an unfair
competition and/or violating the consumers' rights.
The KPPU, also established under the law, has the right to
investigate businesses suspected of employing unfair practices
and imposing sanctions on them.
KPPU last year suffered a blow in its efforts to keep fairness
in the country's business competition when the court overturned
the commission's decision against a number of parties involved in
alleged irregularities in the sale of government's 72 percent
stake in car maker PT Indomobil.