IAW Will Report Alleged Monopoly of Chromebooks to the KPPU

KPPU Office/ Photo: IST

JAKARTA - Indonesian Audit Watch (IAW) has confirmed that it will officially report alleged unhealthy business competition practices in the Chromebook procurement project to the Competition Supervisory Commission (KPPU) next week.

The report is not merely a criticism of policy, but is compiled as a public complaint (DUMAS) based on the facts of the trial, the findings of the Financial Audit Agency (BPK), and an analysis of competition law.

"This is no longer about buying the wrong thing or the wrong specifications. This is about the market structure that is formed to lock in one ecosystem," said Iskandar Sitorus, Founding Secretary of IAW.

IAW sees the project of digitizing education through Chromebooks not as a regular procurement. In its study, there are patterns that are considered systemic: Technical specifications that can only be met by Chrome OS and Chrome Device Management (CDM); No room for other operating systems such as Windows or Linux.

"If the specifications are locked from the beginning, then the tender is no longer a competition. It's just a formality," said Iskandar.

One of the crucial points in the IAW report is the fact of the trial at the Central Jakarta Corruption Court. There it was revealed that: Microsoft objected to the procurement design. Even the issue was a concern in the Cabinet Secretariat environment. However, there was no change in the specifications that opened the competition. In the perspective of business competition, this is not considered just a normal business objection.

"If a global player like Microsoft can't get in, it's not because it's losing out on competition. It's because it's not given the opportunity to compete," said Iskandar.

IAW also highlighted the consolidation auction mechanism used in this project. Administratively there are more than one tender participants, the process looks competitive. However, substantively all participants come from the same technology ecosystem, there is no competition between platforms.

This phenomenon, according to Iskandar, in competition law is known as illusory competition, this competition only exists on paper.

"Who competes is only the distributor, not the technology. In fact, what determines the value is the technology," he explained.

For Iskandar, the BPK's findings strengthen IAW's analysis. In various reports on the audit of education ICT procurement, the BPK found hundreds of thousands of devices that were not optimal or idle, specifications that did not meet regional needs, an imbalance between costs and benefits, and dependence on repeated licenses. For him, this is not just inefficiency.

"In economic theory, if competition dies, the result will be this: expensive, ineffective, and unused," said Iskandar.

A total of four articles as the basis for the report to the KPPU, namely:

Article 15 of Law No. 5/1999 concerning closed agreements (exclusive dealing) Article 19 on abuse of dominant position Article 22 on tender collusion Article 24 on market dominance leading to monopoly. According to IAW, Article 24 is the key.

"This is not a natural monopoly. This is a monopoly formed by policy," said Iskandar.

IAW also highlighted that the benefits in this scheme do not only come from the sale of devices. The model used includes annual licenses, cloud-based management systems, long-term operational dependencies.

"Once you get in, it's hard to get out. That's the essence of vendor lock-in," he explained.

He emphasized that in international practice, public procurement must be technology neutral. Standards such as OECD and UNCITRAL explicitly prohibit specifications that lead to certain brands, lock in certain platforms, and close off competition from the start.

"The state should open the market, not lock it," said Iskandar.

Iskandar ensured that the official complaint would be submitted to the KPPU next week. Accompanied by complete documents, including the facts of the trial and legal analysis. Intended to encourage a preliminary investigation (preliminary investigation). IAW hopes that the KPPU does not see this as a normal case.

"If this is left unchecked, in the future all technology projects can be locked in the same way," concluded Iskandar.