The Job Creation Law (“Law 11/2020”) concerning to the monopolistic practices and unfair business competition

Law No. 11 of 2020 concerning the Job Creation Law (“Law 11/2020”) amends various laws in various sectors, one of which concerning the monopolistic practices and unfair business competition. These changes have also been supplemented by Government Regulation No. 44 of 2021 on the Implementation of the Prohibition against Monopolistic Practices and Unfair Business Competition (“GR 44/2021”), which was officially announced by the Cabinet Secretariat to the public on 21 February 2021 and was officially enacted as of 02 February 2021.

This GR 44/2021 introduces a timeline for legal remedies upon the Commercial Court’s verdict and a new mechanism to determine the maximum amount of administrative sanctions for any violation as stipulated under the Law No. 5 of 1999 concerning Prohibition of Monopolistic Practices and Unfair Business Competition (“Competition Law”).

In respect to the Business Competition Supervisory Commission (Komisi Pengawas Persaingan Usaha or abbreviated as “KPPU”) verdict, GR 44/2021 governs that any business actor could submit an objection upon the KPPU’s verdict to the Commercial Courts instead of District Courts, in its domicile within 14 business days after receiving a notification of the KPPU’s verdict. According to this provision, such objection should be examined within 3 – 12 months by the Commercial Court.

If an appeal is to be filed against the Commercial Court’s ruling, it has to be submitted to the Supreme Court within 14 days of receipt of the notification of the Commercial Court’s ruling

With regards to the administrative sanctions, as stipulated under the Law 5/1999 which was recently amended by Law 11/2020, the upper limit of administrative sanctions was removed and the maximum amount of the administrative sanctions will be calculated based on either of the following formulas, at the sole discretion of the KPPU on the following provisions:

• a maximum of 50% of the net profit obtained by business actor in the relevant market during the period of the violation to the Competition Law; or
• a maximum of 10% of total sales in relevant market during the period of the violation to the Competition Law.

As a guarantee that the business actor will pay the fine, the KPPU will ask for certain collateral when the KPPU reads out the KPPU’s verdict, the reported party is required to submit a sufficient bank guarantee, for a maximum of 20% of the amount of sanctions, by no later than 14 business days after receiving the notification of the KPPU’s verdict.

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