Current affairs

The authority of Indonesia's Business Competition Monitoring Unit (KPPU)【prohibition of monopolistic practices and Grab fined for violating unfair business competition laws】

2020/07/04

インドネシアの事業競争監視委員会(KPPU)の権限【独占的慣行の禁止と不公正な事業競争法違反で制裁金を課されたGrab】

Grab fined for antitrust violations

On July 2, Indonesia Business Competition Monitoring Unit KPPU (Komisi Pengawas Persaingan Usaha) announced that Grab Indonesia (PT Solusi Transportasi Indonesia) has signed an agreement with car rental company PT.TPI (PT Teknologi Pengangkutan Indonesia (Teknologi Pengangkutan Indonesia) for its discriminatory practice (praktik diskriminasi) of giving preferential treatment to registered drivers over ordinary drivers, and
A fine of 29.5 Milyar was imposed on Grab and 19 Milyar on PT. TPI for prohibiting monopolistic practices and violating the Unfair Business Competition Act (Larangan Praktik Monopoli dan Persaingan Usaha Tidak Sehat).

The Business Competition Monitoring Unit (KPPU) has imposed fines of $29.5m on Grab and $19m on PT.TPI.
It found that Grab's manipulation of registered drivers of its partner car rental company PT.TPI to receive orders in preference to other drivers constituted a violation of the prohibition of monopolistic practices and unfair business competition law.
money.kompas.com/read/2020/07/0…

The problem was discovered last October 2019 in Medan, North Sumatra, in October 2019, in Medan, North Sumatra, by Grab, which belongs to Oraski (Organisasi Angkutan Sewa Khususus Indonesia), a special car rental organization, which is not part of PT.TPI Joint Union (koperasi). It was first reported to the KPPU by the drivers that they were being treated unfairly by the PT.TPI joint union drivers, who were given preferential treatment by Grab to get priority orders.

Application provider company Grab's partner company PT. TPI is the operator of an organization that allows people who don't have their own cars to join the TPI co-op and pay a rental fee to the co-op to rent a car and work as a Grab driver, the TPI co-op It was alleged that drivers were getting priority orders on the app over the average driver.

In addition, Grab drivers receive a commission (komisi) of Rp 700,000 if they meet the sales target of 2 Juta per week, from which 20% is deducted to Grab, but TPI co-operative member drivers receive the preferential treatment of not being deducted, resulting in an increase in the number of TPI co-operative members and a reduction in the percentage of non-TPI drivers, which was deemed to be a monopolistic practice and unfair business competition.

The KPPU has ordered Grab and PT.TPI to pay the fines within 30 days, a quick response that can be made because the KPPU is an independent body that is not directed or supervised by a third party.
It is similar to the same independent national investigative body, the Narcotics Commission BNN (Badan Narkotika Nasional) and the Corruption Eradication Commission KPK (Komisi Pemberantasan Korupsi).

Overview of the powers of the Business Competition Monitoring Unit (KPPU) and antitrust law

In 1998, succumbing to public dissatisfaction with the political and economic turmoil and deteriorating security caused by the riots, the 32-year-long Suharto dictatorship ended, and then Vice President Habibie was elevated to the presidency, followed by the Gusdur (Wahid) government in 1999 and the Megawati government in 2001.
Indonesia's Constitution and laws have been amended in line with democratization, and in the process, the Law of the Republic of Indonesia on Prohibition of Monopolistic Practices and Unfair Business Competition No. 5 of 1999 was enacted and promulgated in March 1999, and came into effect in September 2000.

The KPPU is an independent body that is not directed or supervised by the government or any third party, and has very strong powers to investigate and evaluate agreements that cause monopolistic behavior or unfair business competition, conduct hearings (legal procedures prior to trials or decisions by government agencies, etc.), make final decisions and impose administrative measures.
The imposition of administrative fines on Grab and PT. TPI is based on this.

Agreements prohibited by the Antimonopoly Law (Law of the Republic of Indonesia on Prohibition of Monopolistic Practices and Unfair Business Competition, 1999, No. 5)

  1. oligopoly
    It is prohibited to enter into agreements with other businesses to jointly control the production or sale of goods or services.
  2. price fixing
    Prohibits entering into agreements with competitors to determine the price of certain goods or services for which consumers will pay in the same relevant market.
  3. Exclusionary behavior
    It is prohibited to enter into an agreement with a competitor that would interfere with another entity's ability to conduct the same business in a domestic or foreign market.
  4. cartel
    Prohibits entering into agreements with competitors that are intended to affect prices by coordinating the production or sale of certain goods or services.
  5. trust
    It is prohibited to enter into agreements with other businesses to cooperate with them by establishing joint ventures or larger enterprises or by keeping individual companies or their members alive with the intention of controlling the production or sale of goods or services.
  6. buyer's oligopoly
    It is prohibited to enter into agreements with other businesses that are intended to jointly control the purchase or receipt of goods or services in the relevant market in order to control the price of the goods or services in the relevant market.
  7. vertical integration
    It is prohibited to enter into agreements with other businesses for the purpose of controlling the production of more than one product that is directly or indirectly included in the production process of a particular good or service.
  8. Exclusionary Agreements
    It is prohibited for a recipient of goods or services to enter into an agreement with another business that the recipient of the goods or services shall resell or not resell such goods or services only to a specific counterparty or to a specific territory.
  9. Agreements with Foreign Operators
    It is prohibited to enter into an agreement with a person located in a foreign country that contains content that will cause monopolistic acts or unfair business competition.

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