KPPU: Fair Business Competition Is A Requirement For Quality Economic Growth

Illustration. (Photo: Doc. Antara)

JAKARTA - The Business Competition Supervisory Commission (KPPU) affirms that the protection of business competition in a fair, healthy and comprehensive manner is a prerequisite for quality economic growth.

"As an institution that oversees this issue, KPPU plays a role in maintaining the business climate in Indonesia," said KPPU Commissioner Moh. Noor Rofieq in a discussion entitled 'Risk Mitigation of Monopoly Practice Violations and Unhealthy Business Competition' as stated in Jakarta, quoted by Antara, Saturday, November 22.

Noor conveyed that the philosophy of Law Number 5 of 1999 concerning the Prohibition of Monopoly Practices and Unhealthy Competition is basically protecting the competition process itself, and not protecting competitors.

"So we see how business actors build their business fairly, and without any violations," said Noor.

According to him, KPPU in assessing business competition considers, especially the business context, not only from the legal aspect. For example, KPPU does not necessarily think that a business practice violates the law just because prices look the same or parallel.

"Don't be afraid of parallelism because the market is open about price information. And this must be followed by other factors," he said.

The KPPU approach, he continued, always looks at the business context practically, not only from the legalistic aspect.

KPPU groups the risk of violation into the three main aspects of business. In terms of production, for example, violations can occur if business actors regulate production volume not for efficiency, but intentionally control resources or affect the market.

There are also aspects of marketing and prices that are often in the spotlight along with pricing issues. According to Noor, KPPU does not immediately rate high prices as a violation.

"This is because factors such as the Internal Rate of Return (IRR), Return on Investment (ROI) and costs for industries that are capital-intensive will be taken into account," he explained.

However, he also said, the practice of tax violations that led to unreasonable production costs could be an entry point for alleged violations of Law no. 5/1999.

Another aspect is distribution or channeling. In this context, Noor reminded business actors to be careful in replacing distributors, and ensured that there was no element of discrimination or intentional to get rid of certain parties.

"An example of discrimination that can occur is the difference in the payment tempo," he said.

In the same place, another KPPU Commissioner Ridho Jusmadi added that from Law No. 5 of 1999, KPPU paid attention, especially to the issue of price-fixing.

According to Ridho, this practice is common in the industrial sector which is oligopolitic, such as pharmaceuticals, oil and gas, and infrastructure.

He also mentioned the practice of violating cartel businesses which often did not leave a written mark.

"But legal practitioners have the doctrine of the civil is on the details. We look for the details, there must be a slip. That's what we exploit in the proof," said Ridho.