Newsletter on Indonesian Competition Law and Policy

Volume I / 2014

COMPETITION ADVOCACY INTERNATIONAL

FLASHNEWSLAW ENFORCEMENT

n Regional Comprehensive Economic Partnership and 4th Meeting of Trade Negotiation Committee (RCEP–TNC)

n The 13rd ASEAN Expert Group on Competition Meeting

n US-FTC Workshop on Competition in Health Care

n Interface of Intellectual Property and Competition Laws (UNCTAD-DGIPR-KPPU Workshop)

n KPPU’s New Authority to Supervise Partnership in MSMEn KPPU Support the Government of East Java in the

Implementation of ASEAN Economic Communityn KPPU Secretariat with a new organizational structure

n Collusion in CT-SCAN Procurement Causing Three Billion Loss to State’s Budget

n KPPU’s Decision on the Case of Garlic’s Importation

STRENGTHENING REGIONAL AND MULTILATERAL

COOPERATION

Volume I / 20142

Indonesia is actively involved in various international forums both regionally and multilaterally. In addition to bilateral cooperation, these two kinds of cooperation are important to take into account. KPPU actively involved in competition policy and law matters such as in ASEAN Expert Group on Competition (AEGC), RCEP TNC, UNCTAD, ICN and OECD by sending delegates/participants and contribution papers on respective issues.

Recently, KPPU also have a new authority which is to supervise partnership on Micro, Small and Medium Enterprises (MSMEs). Under Article 31 of Government Regulation No. 17 Year 2013 concerning the Implementation of Law Number 20 Year 2008, the Commission may conduct supervision on the implementation of partnership and coordinate with relevant agencies.

Surely this new authority will help KPPU in strengthening its position, especially in regional and multirateral cooperation, due to KPPU’s involvement in the Competition Chapter of Economic Partnerships between Indonesia and other countries.

At last, we’d truly wish a never ending support from our stakeholders to carry out those authorities. Enjoy your reading!

Best Regards,

Director Mohammad Reza

Editor in Chief Verry Iskandar

Managing Editors Retno Wiranti

Editorial Staff Ardaiyene Suharyati

Rini Anjaswari

Maretha Wulandini

Photography Nanang Sari Atmanta

Kompetisia NewsletterPublic Relations and Legal Bureau

Komisi Pengawas Persaingan Usaha (KPPU)INDONESIA

Address Ir.H. Juanda Street No. 36 Central Jakarta 10120Tel 021-3507015 / 3507043Fax 021-3507008Website http://eng.kppu.go.id/Email international@kppu.go.id infokom@kppu.go.id

EDITORIAL

CONTENT

COMPETITION ADVOCACY

LAW ENFORCEMENT

FLASHNEWS

INTERNATIONAL

3 US-FTC Workshop on Competition in Health Care

4 KPPUs Visit to Chamber of Commerce and APINDO Representative in South Sulawesi Raised SMEs Issue

5 Study Visit from Prof. Dr. Hazairin University

5 Interface of Intellectual Property and Competition Laws (UNCTAD-DGIPR-KPPU Workshop)

7 Collusion in CT-SCAN Procurement Causing Three Billion Loss to State’s Budget

7 Bid Rigging in Ministry of General Construction8 KPPU’s Opinion on the Acquisition of PT. Axis

Telekom Indonesia by PT. XL Axiata, Tbk8 KPPU Punished PT. Dunia Pangan for Overdue

Post-Notification9 KPPU’s Decision on the Case of Garlic’s

Importation10 Cartel in Belawan Port, North Sumatera10 KPPU Punished PT. Muarabungo Plantation

for Overdue Post-Notification

11 Regional Comprehensive Economic Partnership and 4th Meeting of Trade Negotiation Committee (RCEP–TNC)

12 KPPU Participated in the 10th Anniversary Celebration of OECD/Korea Policy Centre

14 The 13rd ASEAN Expert Group on Competition Meeting

15 KPPU’s New Authority to Supervise Partnership in MSME

15 KPPU Support the Government of East Java in the Implementation of ASEAN Economic Community

15 KPPU Secretariat with a new organizational structure

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COMPETITION ADVOCACY

US-FTC Workshop on Competition in Health Care

Jakarta, 6th March 2014 – Health care is one of the main issues in many countries. Even the International Covenant on Economic, Social and Cultural Rights and other legally binding international and regional human rights treaties includes the Right to the highest attainable standard of physical and mental health.

States –national governments– bear the primary responsibility for making human rights as a reality. And there is no exception for competition law and

policy. In United States alone, health care service markets have multiple actors, such as; Doctors/Hospitals, Patients, Insurance Companies – “Managed Care Organizations” or “MCOs”, U.S. Government, Employers, Health Care Exchanges.

While some patients prefer to pay directly for health care services, most customers opt to use insurance (or “MCOs”). Hospitals compete to be included in MCOs’ provider networks and the hospitals negotiate the rates paid by the MCO to the hospital and other contractual terms.

Competitive analysis properly focuses on the impact of the Acquisition on hospital/MCO negotiations. This stage is one of the most important stages that were learned by the KPPU’s Junior and Senior Investigators at the US-FTC workshop on Competition in Health Care held in Jakarta, at 6th March 2014, which presented by Attorneys of United States Federal Trade Commission, James E. Rhilinger and Nicholas A. Widnell. [EWN]

Volume I / 20144

COMPETITION ADVOCACY

KPPUs Visit to Chamber of Commerce and APINDO

Representative in South Sulawesi Raised SMEs Issue

Makassar, 26th March 2014 – KPPU’s Representative Office of Makassar visited the Chamber of Commerce and APINDO (Indonesia Employers Association) representative in Makassar, capital of South Sulawesi. This visit was conducted as part of KPPU courtesy activities to its local counterparts in order to strengthen relation and cooperation as well as to exchange information on business and competition condition in the region.

During the visit to local Chamber of Commerce, Head of Makassar Representative Office, Mr. Ramli Simanjuntak, and his team was welcomed by the Head of local Chamber of Commerce of the Province of South Sulawesi, Mr. Zulkarnain Arief. It has been discussed during the visit that the Chamber of Commerce in Indonesia is an organization that takes part as an umbrella of Indonesia’s business conduct. It was established as a facilitator for employers. The

Indonesian Chamber of Commerce appreciate KPPU tasks and ready to support the positive development of Indonesia, especial ly in implementing the Law No.5/1999 in South Sulawesi. It was also informed that the local Chamber of Commerce has established SMEs in Makassar which may contribute to it self and give more chances to other businesses to flourish.

The visit to local Chamber of Commerce was followed by the visit to APINDO representative in Makassar. The discussion during this visit was more on local economic activities. In this case, APINDO explained that there are some problems occurs in Makassar such as the growth of modern market in the city, the increase of logistic cost and the problem in raw material’s supply to certain industries. APINDO hopes KPPU may work more intensively towards the competition related problems in Makassar. [ARD]

Study Visit fromProf. Dr. Hazairin University

Jakarta, 20th February 2014 – As an effort to give comprehension understanding about Competition Law to students, KPPU accepted study visit from Prof. Dr. Hazairin University, Bengkulu, on Thursday (20/2).

Head of Legal, PR, and Cooperation Bureau, Mohammad Reza, said that KPPU need support from all parties, including students. Nowadays, competition institutions such as KPPU have been developed massively in ASEAN, with Indonesia as the major pioneer. In those countries including Indonesia, the main purpose of the establishment

5Volume I / 2014

COMPETITION ADVOCACY

Study Visit fromProf. Dr. Hazairin University

of Competition Law is to create the consumer welfare.

Since its existence, KPPU has a significant contribution in national economic development. Reza also explain that in Indonesia, Competition Law and Consumer Protection Law regimes were implemented by different institution. It’s quite different with Singapore which unified those regimes in one body. It is interesting to learn those facts because both of those regimes have the same objective, which is consumer welfare.

In the future, KPPU expects every student that has been learned this knowledge will be the agents of information and help to maintain the internalization process of Competition Law in this country. [MAR/EWN]

Interface of Intellectual Property andCompetition Laws

(UNCTAD-DGIPR-KPPU Workshop)Jakarta, 7th April 2014 – As a form of cooperation between KPPU and Directorate General of Intellectual Property Rights (DGIPR) and United Nations Conference on Trade and Development (UNCTAD), a workshop about Interface of Intellectual Property and Competition Laws was held in DGIPR, Jakarta. This Workshop presented experts from UNCTAD, Japan Fair Trade Commission (JFTC), DGIPR, KPPU and academician.

Competition Law enforcement and policy speak about presenting you with a legal certainty and justice to ensure fair business environment and or equal opportunities you’ll need in entering a market. Therefore, it is important to ensure the establishment

of competition law enforcement and policy in all sectors, especially in Intellectual Property Rights.

Both competition law and IPR law shares the same basic objective of promoting consumer welfare and an efficient allocation of resources, ultimately to encourage innovation that will constitute a dynamic and competitive market economy.

Law Number 5 Year 1999 itself, has exempted the agreements connected with Intellectual Property Rights such as license, patent, trademark, copyright, industrial product design, integrated electronic circuit, and trade secrets, through Article 50 (b). But of course, those exemptions have a term and condition.

Volume I / 20146

Hereby some conducts related to IPR that could breach the Competition Law:

• Refusal to License (Refusal to Deal) A patent owner has the discretion whether and

to whom it will grant a license, therefore we need to know the rationale for refusal and assessing competitive harm.

• Tying Arrangements A tie-in occurs when a buyer or licensee, seeking

to acquire or license a desired product (the tying product), must purchase or license a different product (the tied product) from the licensor, or at least agree not to purchase or license the tied product from any other supplier.

• Package licensing A critical issue in evaluating package licenses is

often whether the package license is mandatory, whether the licensee is compelled to license patents it does not want. The compulsion may be express or implied. If the package license serves the mutual convenience of both licensee and licensor, then there is no compulsion or coercion.

• Tie-Outs A covenant in a license agreement precluding the

licensee from dealing in products that compete with the licensed, patented, or copyrighted product.

• Patent Pool A patent pool is created when a group of patent

holders decide to license their patents to each other and to third parties collectively.

• Excessive Royalties and or Discriminatory Royalties A patentee had absolute discretion to set royalty

rates at high levels and or different levels for different licensees, except it’s innately discriminatory and anticompetitive.

• Field of use restrictions Field of use restrictions in a patent license limit the

licensed products a licensee is permitted to make, use, or sell. The limitation may be worded in terms of specified products, specified product markets, or customer sets.

• Price limitations and Minimum Resale Price Maintenance

Limiting the minimum price a licensee may charge when it sells a patented product.

• Grantback Clauses A grantback clause in a patent license relates to

the licensee’s future inventions, whether or not patented, and it’s obligation to assign or license them to the licensor.

In the past, IPR Law’s grant of exclusivity was seen as creating monopolies that were in tension with Competition Law. But nowadays, both disciplines could work hand in hand to bring new and better technologies, products and services to consumers at lower prices. [EWN]

COMPETITION ADVOCACY

7Volume I / 2014

LAW ENFORCEMENT

Bid Rigging in Ministry of General Construction

Jakarta, 21st January 2014 – KPPU decided PT Ifani Dewi, PT Antar Mitra Sejati, and the Procurement Committee of Heavy Equipment in Ministry of General Construction, guilty on bid rigging (Case Number 04/KPPU-L/2012). The evidences revealed in investigation process such as, the coordinated conduct between business actors and the procurement committee and the falsified of procurement

documents.

Therefore, the Commissioners Council imposed fines sanction to PT Ifani Dewi and PT Antar Mitra Sejati, and prohibited them to participate in similar procurement for consecutive 2 (two) years since this decision is legally binding.

M e a n w h i l e , K P P U a l s o recommended the Ministry of General Construction to punish

Collusion in CT - SCAN Procurement Causing Three Billion Loss to State’s Budget

Medan, 24th April 2014 – KPPU declared four medical equipment’s business actors guilty for collusion with the Procurement Committee of CT-SCAN (Computerized Tomography) for Pirngadi Hospital, Medan. Those business actors were CV Duta Mulya Pratama, PT Menara Fazira, PT Graha Insani Mandiri, dan CV Rifki Abadi, located in Medan, North Sumatera.

This decision was read in 23rd April 2014 by the Commissioners Council, namely Dr. Sukarmi, Kamser Lumbanradja, M.B.A dan Dr. Drs. Chandra Setiawan. In the investigation process, KPPU found some evidences on collusion between business actors and the Procurement Committee such as, similarity in document errors, metadata, Internet Protocol, upload timing, and certain exclusivity from the Procurement Committee to those business actors.

KPPU also found that the price offered by CV Duta Mulya Pratama, the winner of this procurement, was excessive (compared with the price of distributors). Therefore, it has created inefficiency and causing State’s Budget Loss about IDR 3 Billion. According to those evidences, the Commissioners Council imposed fines to the business actors

amounted to:

1. CV Duta Mulya Pratama (IDR 528.556.700),2. PT Menara Fazira (IDR 264.278.350),3. PT Graha Insani Mandiri (IDR 158.567.010), and4. CV Rifki Abadi (IDR 52.855.670)

Moreover, the Commissioners Council also prohibit those four business actors to participate in any medical equipment procurement of Republic of Indonesia for 2 (two) consecutive years. [EWN]

the Procurement Committee in accordance with the disciplinary regulation and to implement fair competition in the future procurement.

This decision was made by the Commissioners Council namely Chandra Setiawan, Kamser Lumbanradja and Sukarmi in KPPU Building, Jakarta at Tuesday (21st January 2014). [EWN]

Volume I / 20148

LAW ENFORCEMENT

KPPU’s Opinion on the Acquisition of PT. Axis Telekom Indonesia by PT. XL Axiata, Tbk

KPPU concludes that acquisition of PT. Axis Telekom Indonesia (AXIS) by PT. XL Axiata, Tbk (XL) is not lead to monopolistic practices and unfair business competition. Nevertheless, KPPU give some note to the acquisition.

First Note from KPPU, considering the market share of three businesses actors in the telecommunications services (Telkom, Indosat, dan XL) were reaching 89,05%, KPPU requires XL to provide report on market development, product, and charge every 3 (three) months in 3 (three) years. The opinion’s given after considering XL’s commitment to remain as a market pioneer in competitive rate of mobile telecommunications services, so the commitment will be an integral part of the KPPU’s opinion. Furthermore, the opinions are restricted to the acquisition of AXIS’ shares by XL, therefore, if there is anti-competitive behavior by the parties nor its subsidiaries in the future, that behavior will not

IDR 45.27 trillion and the value of combined sales around IDR 23.38 trillion.

Increasing market concentration index also occurred in the tower leasing services market in the province of D.I.Yogyakarta. However, since there are some business actors in the tower leasing services in D.I.Yogyakarta, and the policy of using the tower jointly, the antimonopoly effect could be suppressed.

Furthermore, as a prevention act in the market domination of cellular telecommunication, KPPU will conduct an intensive monitoring of that market.

The complete Commission’s opinion on the acquisition will be published in KPPU’s website a t www.kppu .go . id , a f t e r the company confirmes their information’s confidentiality (ie, 10 working days after the opinion received by the parties). [MAR/EWN]

KPPU Punished PT. Dunia Pangan for Overdue Post-Notification

KPPU punished PT. Dunia Pangan (Reported Party) for 13 days overdue Post-Notification in the acquisition of PT Sukses Abadi Karya. The verdict refers to Case Number 03/KPPU-M/2014 of Alleged Violations on Article 29 of Law No. 5 of 1999 in juncto with Article 5 of Government Regulation No. 57 Year 2010.

Therefore, the Commissioners Council imposed fines to PT Dunia Pangan at the amount of IDR 1,000,000,000 (one billion rupiah). [RAJ]

be excluded from the competition law.

The official opinion of KPPU set forth in 18 February 2014 as a comment of submitted consultation by XL on 1st August 2013. The consultation itself was carried out simultaneously with XL’s plan on purchasing 95% of AXIS’s share, which issued to Teleglobal Investment BV and BV Althem. The acquisition will increase the assets of XL (based on data in 2012) about

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LAW ENFORCEMENT

KPPU’s Decision on the Case of Garlic’s Importation

Jakarta, 20th March 2014 – KPPU declared nineteen companies (CV Bintang, CV Karya Pratama, CV Mahkota Baru, CV Mekar Jaya, PT Dakai Impex, PT Dwi Tunggal Buana, PT Global Sarana Perkasa, PT Lika Dayatama, PT Mulya Agung Dirgantara, PT Sumber Alam Jaya Perkasa, PT Sumber Roso Agromakmur, PT Tritunggal Sukses, PT Tunas Sumber Rezeki, CV Agro Nusa Permai, CV Kuda Mas, CV Mulia Agro Lestari, PT Lintas Buana Unggul, PT Prima Nusa Lentera Agung, PT Tunas Utama Sari Perkasa) to violate Article 19 (c) and Article 24.

KPPU also declared the Directorate General of Foreign Trade, Ministry of Trade and Minister of Trade to violate Article 24 on quota limitation in garlic importation through issuing Ministry of Trade’s Regulation, Number 60/Permentan/OT.140/2013 and through colluding with business actors in the issuing and extending

process of Import Approval Letter, even though there was no legal standing on Import Approval Letter. This irresponsible action has led to the imbalance of garlic’s supply and price in domestic market.

KPPU imposed fines from IDR 20 billion to IDR 921 billion to those companies and the government officials. The decision was made today by Commissioners Council, namely Dr. Sukarmi, Munrokhim Misanam, Ph.D, Dr. Muhammad Syarkawi Rauf, R. Kurnia Sya’ranie, S.H., M.H, and Saidah Sakwan, M.A.

This case was initiated by KPPU, and the Commissioners Council also recommended that the Ministry of Agriculture and Ministry of Trade should be aware of the principal of fair competition in formulating their regulation, and that each regulation on importation especially importation with quota limitation should be well-coordinated with related institutions. [EWN]

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LAW ENFORCEMENT

Cartel in Belawan Port, North SumateraMedan, 17th March 2014 – Fifteen companies and associations (CV Belawan Indah, PT Mitra Jaya Bahari, CV Jaya Abadi Trans, PT Benua Samudera Logistik, PT Transporindo Agung Sejahtera, CV Wahana Multi Karsa, PT Samudera Perdana, Koperasi Pegawai Republik Indonesia “Baruna Barat” Belawan, PT Berkat Nugraha Sinar Lestari, PT Tunas Jaya Utama, Fa. Multatuli Bhakti, PT Lintas Samudera Jaya, Head of

Cargo Transportation Organization of Belawan Port, The Council of Forwarders, Logistic Transportation and Expedition of Indonesia (GAFEKSI) has been proven in violating Article 5 on price fixing in Cargo’s Transportation Tariff in Belawan Port, North Sumatera. This price fixing agreement effectively implemented in the year of 2011 until 2012, and the case itself was initiated by KPPU.

In the KPPU’s decision, the Commissioners Council which membered by Munrokhim Misanam, Kurnia Sya’ranie and Tresna P. Soemardi, stated that this agreement has eliminated price competition and price option for consumers, therefore has led to consumer loss.

As a penalty on this action, the Commissioners Council imposed fines on each Reported Party starting from IDR 22 billion to IDR 463 billion. The Commissioners Council also recommended that the Land Transportation Organization of North Sumatera (ORGANDA) formulating a provision criteria for their member council. [EWN]

KPPU Punished PT. Muarabungo Plantation for Overdue Post-Notification

KPPU punished PT Muarabungo Plantation for overdue Post-Notification in the takeover of PT Tandan Abadi Mandiri. It was decided that PT Muarabungo Plantation proven legally and convincingly breached Article 29 of Law No. 5 of 1999 in juncto with Article 5 Government Regulation No. 57 Year 2010 (Case Number 01/KPPU-M/2014).

KPPU found the combined value of assets and turnover has met the minimum threshold to be notified, in accordance with the provisions of Article

29 para. 1 of Law No. 5 of 1999. Meanwhile, based on the Letters from Ministry of Justice and Human Rights Number AHU - AH.01.10 - 05 810 about Notification on the Amends of PT Tandan Abadi Mandiri Portfolio and the Post-Notification date to KPPU, PT Muarabungo Plantation was 76 days overdue in the Post-Notification.

Therefore, the Commissioners Council imposed fines to PT. Muarabungo Plantation at the amounts of IDR 1.249 billions. [RAJ]

ANTA

RA

11Volume I / 2014

INTERNATIONAL

Regional Comprehensive Economic Partnership and 4th Meeting of Trade

Negotiation Committee (RCEP – TNC)ASEAN launched free trade negotiations between member countries since 1993. When the AEC (ASEAN Economic Community) was declared in Singapore on 2007, ASEAN would start the FTA in 2015. We have been agreed to lower the trade protectionism by made the Common Effective Preferential Tariff, which lowered the amount of import duties of up to 0-5 percent.

In 2000, ASEAN improved trade negotiations with external of ASEAN. Currently there are 23 trade agreements. The major challenges that were encountered by the trade agreement with the abundance and diversity commitment are quality, standards, and terms of trade. This fact was realized before that the ASEAN leaders began to think about the broader trade agreements.

Currently, the ASEAN countries are inititating two multilateral negotiations within the scope of the Asia Pacific: Trans Pacific Partnership (TPP) and the Regional C o m p r eh en s i v e Eco n o m ic Partnership (RCEP). RCEP is a combination of the two proposed free trade agreements, namely the East Asia Free Trade Area (led by China) and the Comprehensive Economic Partnership in East Asia (led by Japan), the combination that produces the ASEAN-led RCEP. This cooperation focused on efforts to harmonize the various

commitments, which are the terms of trade, as well as the standard overlapping and inconsistencies.

RCEP concerned on s ingle agreement on trade products, rather than the possibility of reduction in import duties. Trade negotiation was far from the discussion of non-tariff barriers. When discussed about the TPP there were approximately 20 non-tariff issues, whilst RCEP only discuss 6 issues of non-tariff. In addition to the 10 ASEAN countries (Indonesia, Malaysia, Phillipina, Singapore, Thailand, Myanmar, Loas, Cambodia, Vientam, and Brunei Darussalam), this event was also attended by the six country partners include: Australia , New Zealand , Japan, Korea , India and China.

In the 4th Meeting of the RCEP TNC in Naning, China, the WG on Competition also convened their first meetings, so called The 1st Meeting of Working Group on Competition. KPPU as the competition authority from Indonesia felt the need to present actively in the 4th Meeting of RCEP TNC and the 1st Meeting of the Working Group on Competition. KPPU in this regard represented by Mr. Mohammad Reza (Head of Legal, Public Relations and Cooperation, KPPU RI as Lead Delegation) and Mr. Verry Iskandar (Head of International Cooperation, KPPU RI as Member Delegation). Both are involved in various meetings such as bilateral meeting, ASEAN Caucus Meeting, and the 1st Meeting on Working Group on Competition. [VER]

Volume I / 201412

INTERNATIONAL

KPPU Participated in the 10th Anniversary Celebration of OECD/Korea Policy Centre

OECD/Korea Policy Centre (OECD/KPC) is a joint venture organization of OECD and the Government of Republic of Indonesia which established in 2003 by the signing of MoU between OECD and Korea Fair Trade Commission (KFTC). This organization takes four programmes in focus; which are Competition, Tax, Public Government, and Social Policy. In undertaking its programmes, OECD/KPC provides several workshops in related programmes and dedicated to the countries in Asia Pacific region.

This year, OECD/KPC celebrates the 10th Anniversary of establishment which was held on 19th of March 2014 in Seoul. In its 10th celebration, OECD/KPC aims to become a better organization which provides technical assistance. After conducting workshop for several years, OECD/KPC starts thinking of having a new format of technical assistance which may suites more to recipient countries. In this regards, a topic of ‘Optimizing Technical Assistance Programme to Develop Competition Authorities and Enhance

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INTERNATIONAL

International Cooperation’ was raised at the celebration event and discussed by several international resource persons such as Vice Chairman of Korea Fair Trade Commission, Commissioners of Competition Commission from Indonesia, India and Mongolia.

This celebration was an important event to attend since it was also attended and briefed by Chairman of Korea Fair Trade Commission, Head of OECD Competition

Committee, and the Executive Secretary of OECD/KPC.

Along with this anniversary c e l e b r a t i o n , O E C D / K P C Competition Programme also held a Workshop on International Cooperation in Cross-Border Competition Cases which was held on 20-21 March 2014 at the same venue of the celebration event. This workshop is a regular workshop that OECD/KPC conducts annually and dedicated

to potential officials of competition authorities or competit ion-regulated bodies in Asia Pacific. To participate, KPPU assigned two officials to participate in this workshop. [ARD]

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INTERNATIONAL

The 13rd ASEAN Expert Group on Competition Meeting

The 13rd AEGC Meeting was held in Bangkok, Thailand from March 19 - 21, 2014. The meetings also held back to back with the 4th Meetings PSC Project and the 1st Website WG Meetings. The meeting was updated on several activities and issues regarding the preparation for post 2015 for all ASEAN Member States (AMS) to have their own competition law and policy with in 2015.

The Meeting noted the progress of the six measures under Competition Policy. With regard to the six measures on the introduction of competition policy in all AMS by 2015, the Meeting noted the following updates:

a. Brunei Darussalam has registered their completed draft CPL for consultations at the Ministrial level;

b. Lao PDR planned to submit their draft CPL to the National Assembly by 2015; and

c. The Philippines’ draft legislation is currently under bicameral consultations and there was optimism that the draft will be ready by 2015.

The meeting was attended by Thailand, Indonesia, Malaysia, Singapore, Vietnam, Brunei Darussalam, Lao PDR, and Cambodia with the absent of Myanmar who didn’t send their delegation. [VER]

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FLASHNEWS

KPPU’s New Authority to Supervise Partnership in MSME

KPPU has a new authority to supervise partnership in term of business actors dealing with other firms especially with MSMEs. This relation (partnership) between big firms and MSMEs tend to be harsh and the interest of MSMEs could be abused due to the disparity of bargaining position.

This authority was given by Law Number 20 Year 2008 (Law Number 20/2008) which was later described in detail in Government Regulation Number 17 Year 2013 (GR Number 17/2013) concerning the Implementation of Law Number 20 Year 2008 concerning Micro, Small and Medium Enterprises (MSMEs).

Under Article 31 of Government Regulation No. 17 Year 2013, the Commission may conduct supervision on the implementation

of partnership and coordinate with relevant agencies. This new authority gives power to the Commission to supervise interaction between big firms dealing with MSMEs in their partnership.

The Commiss ion may carry out investigation base on the initiative (ex-officio investigation) and/or report from Reporting Party to the Commission, pursuant to Article 32 of Government Regulation No. 17 Year 2013 that infringement of the law may be subject to administrative sanction. Law Number 5 of 1999 concerning Prohibition of Monopolistic Practices and Unfair Business Competition and Commission Regulation Number 1 of 2010 concerning Case Handling Procedure in KPPU will be imposed for infringement of this conduct. [VER]

KPPU Support the Government of East Java in the Implementation of ASEAN Economic Community

Surabaya, 29th January 2014 – Welcoming the Free Trade Area in 2015 needs countless effort to internalize concepts and values of fair competition. Those issues were revealed on Focus Group Discussion (FGD) about Inventory Problems of Economic Development in East Java which was held by Regional Planning Agency (Bappeda) of East Java, on 29th January, 2014 in Bumi Hotel, Surabaya. The FGD was attended by representatives from Local Government Unit (SKPD) of East Java, business actors, academics, and KPPU’s Representative Office of Surabaya.

In this event, KPPU’s Representative Office of Surabaya presented the importance of concepts and values of fair trade competition in local development of East Java. It was a form of effort to

protect the free trade concept that will be implemented in ASEAN Economic Community. Furthermore, it’s important to build a synergy between KPPU and Local Government of East Java to prevent monopoly practices and unfair competition. [MAR/EWN]

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FLASHNEWS

KPPU Secretariat with a new organizational structureKPPU had just implemented a massive change on its organizational structure. This new structure has been implemented on 11 February 2014 in order to manifest a bureaucracy reform and create conducive work environment. However, this structural change has no impact on the Commission Board.

Under this new structure, KPPU has three major departments, namely Secretary General, Deputy of Prevention and Deputy of Law Enforcement which are under the Commission Board. This new formation was made to adjust KPPU’s organizational structure in supporting the KPPU missions which are prevention, law enforcement and institutional strengthening. Formerly,

KPPU had 9 (nine) bureaus under single Secretary General.

In relation with this massive organizational structure, KPPU Chairperson, Nawir Messi, appointed the new structural officials through an inauguration ceremony on 19 February 2014 at KPPU Building, Jakarta. At the inaugural ceremony, Messi addressed his hope towards the new appointed structural officials. Messi explained that competition authority like KPPU will be an institution that has huge influence in national economy. “This inauguration ceremony is a start of a very huge task, please give excellent work for the sake of our public interest” added Messi. [ARD]

KPPU Building, Jalan Ir. H. Juanda No. 36 Jakarta 10120 - INDONESIATel : +62-21-3519144 - 3507015 - 3507043 Fax.: +62-21-3507008e-mail: international@kppu.go.id n infokom@kppu.go.id

SURABAYABumi Mandiri Building, 7 floorJl. Basuki Rahmat No. 129 Surabaya 60271 - EAST JAVATel : +62-31-54540146, Fax : +62-31-5454146e-mail: kpd_surabaya@kppu.go.id

BALIKPAPANBRI Building, 7th floorJl. Sudirman No.40 RT. 26Balikpapan 76112 - EAST KALIMANTANTel : +62-542-730373, Fax : +62-542-415939e-mail: kpd_balikpapan@kppu.go.id

MEDANJl. Ir. H. Juanda No. 9AMedan - NORTH SUMATERATel : +62-61-4558133, Fax : +62-61-4148603e-mail: kpd_medan@kppu.go.id

BATAMGraha Pena Building, 3A floorJl. Raya Batam Center Teluk TeriringNongsa - Batam 29461 - RIAU ISLANDTel : +62-778-469337, Fax : +62-778-469433e-mail: kpd_batam@kppu.go.id

KOMISI PENGAWAS PERSAINGAN USAHA REPUBLIK INDONESIA

KPPU

REP

RESE

NTA

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OFF

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MAKASSARMakassar Tower, 1st floorJl. Nusantara No. 1 Makassar - SOUTH SULAWESITel : +62-411-3610733, Fax : +62-411-3610733e-mail: kpd_makassar@kppu.go.id

www.kppu.go.id @KPPUwww.facebook.com/KPPUINDONESIA

ORGANIZATIONAL STRUCTURECOMMISSION FOR THE SUPERVISION OF BUSINESS COMPETITION (KPPU)

Board of Commissioner(Chairperson, Vice Chairperson, Commissioners)

Internal AffairsOffice

Planning and Financial Bureau

Directorate of Research, Policy and Advocacy

Directorate of Investigation

Planning and Evaluation Division

Organization, Planning and

Human Resource Development

Division

Employees Benefits Division

General Affairs Division

Administration Division

Legal Division

Public Relations Division

Prevention Division

Administration Section

Law Enforcement

DivisionDomestic

Cooperation Division

Foreign Cooperation

Division

Financial and Accounting

Division

Legal, Public Relations and

Cooperation BureauDirectorate of

MergerDirectorate of

HearingDirectorate

of Legal Proceedings

Organization and Human Resources

Bureau

Regional Representative

Offices

Secretary General Deputy of Prevention

Deputy of Law Enforcement

Working Group

Task Force Task ForceTask Force Task Force Task Force

Experts Group

Data and Information Unit