Government Regulation No. 44 of 2021 concerning the Implementation of the Prohibition against Monopolistic Practices and Unfair Business Competition

Following the promulgation of Law No. 11 of 2020 concerning Job Creation (“Job Creation Law”) which has modified several number of laws, including that of relating to business competition as regulated in Law No. 5 of 1999 concerning the Prohibition against Monopolistic Practices and Unfair Business Competition (“Law No. 5/1999”), the government has issued Government Regulation No. 44 of 2021 concerning the Implementation of the Prohibition against Monopolistic Practices and Unfair Business Competition (“GR No. 44/2021”) as a supplemental regulation of the changed provisions made by the Job Creation Law to Law No. 5/1999. GR No. 44/2021 came into effect as of February 4, 2021.

Below are some key changes that are worth observing:

1. Objection against KPPU rulings

Under Law No. 5/1999 which has been amended by the Job Creation Law and further regulated under GR No. No. 44/2021, objection against the Business Competition Supervisory Commission (Komisi Pengawas Persaingan Usaha/”KPPU”) rulings may be raised by the business actor concerned to the Commercial Court, unlike the previous regulations which otherwise provided for such objection to be filed to the District Court. GR No. 44/2021 further regulates that the objection can be submitted within a period of 14 business days commencing from the notification receipt of the KPPU rulings.

2. Administrative sanction in the form of fines

The amount of fines has been amended. Previously, fines could be imposed against violations of the provisions under Law No. 5/1999 with the range of 1 billion Rupiah to 25 billion Rupiah.  Upon the issuance of GR No. 44/2021, the minimum amount remains the same at 1 billion Rupiah. However, there is no maximum capped amount regulated under GR No/ 44/2021, but rather it is provided that the fines shall be calculated based on certain factors, including (i) adverse impact as a result of the violation, (ii) period of violation, (iii) extenuating factors, (iv) aggravating factors, and (v) ability of the business actor to pay.

The calculations of fines are provided as follows:

(a)    maximum of 50% calculated from net profit generated during the violation period; or

(b)   maximum of 10% calculated from total sales during the violation period.

It is also worth noting that GR No. 44/2021 regulates that business actors concerned are required to provide bank guarantee as to ensure the fulfilment of the KPPU rulings. The bank guarantee is regulated to be at a maximum of 20% of the imposed fines, and to be provided within 14 days following the KPPU rulings.