Snags in antimonopoly law

Snags in antimonopoly law

By Destivano Wibowo

JAKARTA (JP): With the promulgation of Law No.5/1999 on Anti-
Monopoly and Unfair Competition it seems that those who have
benefited from monopolistic practices in the past will have to
reevaluate all their business activities.

Monopolistic facilities were either obtained directly or
indirectly, through policies of the New Order administration or
due to their own practice of obstructing competition.

In principle, the Law bans business agents from entering into
agreements and conducting activities leading to monopoly,
monopsony, oligopoly, oligopsony, price discrimination, marketing
area division, boycott, cartel, vertical integration, closed
agreement, conditional purchase, market domination, determination
of very low prices, unfair price determination, collusion, abuse
of dominant positions, double positions, share ownerships with
certain conditions, amalgamation, merger and expropriation of
business entities.

To control the implementation of all the provisions of this
Law, the government has, through Presidential Decree No.75 dated
July 8 1999, set up a Business Competition Control Commission,
with a Board comprising a chairman and a deputy assisted by at
least seven members.

Members of this commission are appointed and dismissed by the
government with the approval of the House of Representatives.
However, members of this commission have yet to be proposed by
the government, even though the Law will become effective in the
next three months (there will be a six-month period of
adjustment).

This may be because our government has been too busy
establishing other commissions. However, there are many
provisions that need defining, both in government regulations and
in policies of the commission, and with only three months ahead,
will the government and the commission have enough time to
formulate the necessary directives?

Article 39 of this Law stipulates that the commission shall be
required to conduct preliminary investigation into each case
having monopolistic tendency, and within 30 days it should decide
if further investigation shall be required.

Failure to be prepared with the necessary directives could
lead to the following possibilities:

a. Article 39 fails to specify whether "days" refers to
business days or calendar days. If within 30 days the Commission
fails to decide whether or not to conduct further investigations,
then shall the business agent suspected of conducting
monopolistic practices be declared free of such practices? Only a
court ruling would decide the guilt or innocence of the suspect.
b. Let us suppose that after the 30-day period the commission
still cannot decide whether or not to conduct further
investigations, while reports of the alleged practice continue.
Shall the 30-day period be calculated from the beginning of the
investigation, or shall the commission affirm that, due to the
new reports, it will conduct further investigations?
c. Suppose further investigation is completed within 60 days and
is extended for another 30 days, but the commission fails to
issue any ruling. Shall the suspect be automatically relieved
from the sanctions of this Law? If the answer is 'yes', can the
business agent sue the commission for slander? The commission
would then only be busy serving the counter claims by such
business people.
d. Since the commission was established under a presidential
decree, there may be a tendency for such business people to
simply ignore the commission's findings because such findings
often are not supported by court decisions.

Therefore, the commission may delegate the task to
investigators. The question is, who would they be? The Criminal
Code specifies that investigators are the police or special
officers appointed for such purposes.

If the investigators are police, then they, apart from
prosecutors or specially appointed officers, would need training
on this law.
e. In the judicial process, suspects are entitled to appeal to
the Supreme Court if they are proven by the court to have
violated the law. This law does not stipulate that the commission
shall also be entitled to make such an appeal.

Therefore, shall the commission through the prosecutor
exercise its right provided within the Civil Code by referring to
the time period specified in this Law? Of course such matters
needs further attention by the policy makers.

And what would happen if the Supreme Court finally annuls the
commission's ruling? Can the commission apply for a review in
accordance with the Civil Code if new matters arise? This should
be possible because the Commission may discover new evidence to
strengthen its claim.

Hopefully, answers to the above already exist, especially
among those who will be charged with implementing this Law.
Diligent implementation is required if we really want to create a
healthy business climate in Indonesia.

The writer graduated from Boston University School of Law and
works at Lubis Ganie Surowidjojo Law Office in Jakarta.