1
ANTITRUST AND UNFAIR COMPETITION LAW
Introduction
The Unitary Republic of United States is one of the major countries in Southeast Asia and
also United States is a developing country in the Southeast Asian region which has a high
population level so that the economy in United States must always be good in order to
improve the standard of living of its population. The more new business actors emerge, it is
certain that the tighter the competition between these business actors, so that it is hoped that
development in the economic sector will lead to the realization of people's welfare.
Since a long time ago, United States society has also been known as a society that is happy
and easy to work together Sometimes the act of competing or competing unhealthily has no
place in our society like working together. But in reality, in the era of globalization and the
development of science and technology, more and more business actors are competing to
improve their respective living standards, more and more unhealthy business competition
arises. One of the things that happens regarding the emergence of unfair business competition
is for example entrepreneurs who are close to or have connections with the power elite have
excessive facilities that have an impact on social inequality. The emergence of a small group
of strong entrepreneurs who are not supported by a true entrepreneurial spirit is one of the
factors that result in the economy becoming very fragile and unable to compete fairly.
Seeing the above conditions, we are required to examine and reorganize business activities in
United States that are not in accordance with the ideals and objectives of the United States
economy, namely those stated in Law no.5 of 1999 concerning Prohibition of Monopolistic
Practices and Unfair Business Competition, so that the business world can grow and develop
in a healthy and correct manner so as to create a healthy competitive climate so as to avoid
forms of monopolistic practices and unfair business competition.
Results And Discussion
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
2
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
3
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
4
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
5
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
6
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
7
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
8
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
9
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
10
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
11
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
12
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
13
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
14
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
15
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
16
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
17
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
18
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
19
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
20
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
21
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
22
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
23
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
24
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
25
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
26
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
27
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
28
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
29
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
30
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
31
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
32
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
33
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
34
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
35
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
36
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
37
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
38
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
39
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
40
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
41
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
42
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
43
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
44
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
45
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
46
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
47
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
48
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
49
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
50
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
51
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
52
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
53
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
54
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
55
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
56
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
57
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
58
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
59
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
60
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
61
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
62
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
63
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
64
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
65
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
66
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
67
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
68
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
69
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
70
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
71
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
72
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
73
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
74
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
75
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
76
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
77
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
78
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
79
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
80
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
81
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
82
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
83
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
84
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
85
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
86
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
87
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
88
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
89
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
90
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
91
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
92
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
93
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
94
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
95
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
96
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
97
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
98
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
99
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
10
0
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
10
1
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
10
2
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
10
3
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
10
4
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
10
5
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
10
6
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
10
7
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
10
8
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
10
9
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
11
0
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
11
1
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
11
2
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
11
3
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
11
4
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
11
5
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
11
6
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
11
7
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
11
8
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
11
9
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
12
0
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
12
1
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
12
2
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
12
3
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
12
4
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
12
5
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
12
6
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
12
7
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
12
8
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
12
9
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
13
0
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
13
1
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
13
2
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
13
3
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
13
4
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
13
5
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
13
6
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
13
7
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
13
8
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
13
9
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
14
0
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
14
1
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
14
2
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
14
3
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
14
4
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
14
5
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
14
6
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
14
7
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
14
8
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
14
9
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
15
0
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
15
1
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
15
2
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
15
3
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
15
4
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
15
5
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
15
6
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
15
7
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
15
8
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
15
9
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
16
0
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
16
1
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
16
2
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
16
3
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
16
4
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
16
5
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
16
6
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
16
7
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
16
8
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
16
9
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
17
0
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
17
1
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
17
2
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
17
3
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
17
4
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
17
5
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
17
6
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
17
7
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
17
8
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
17
9
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
18
0
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
18
1
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
18
2
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
18
3
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
18
4
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
18
5
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
18
6
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
18
7
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
18
8
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
18
9
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
19
0
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
19
1
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
19
2
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
19
3
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
19
4
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
19
5
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
19
6
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
19
7
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
19
8
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
19
9
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
20
0
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
20
1
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
20
2
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
20
3
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
20
4
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
20
5
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
20
6
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
20
7
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
20
8
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
20
9
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
21
0
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
21
1
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
21
2
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
21
3
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
21
4
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
21
5
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
21
6
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
21
7
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
21
8
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
21
9
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
22
0
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
22
1
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
22
2
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
22
3
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
22
4
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
22
5
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
22
6
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
22
7
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
22
8
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
22
9
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
23
0
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
23
1
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
23
2
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
23
3
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
23
4
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
23
5
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
23
6
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
23
7
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
23
8
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
23
9
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
24
0
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
24
1
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
24
2
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
24
3
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
24
4
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
24
5
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
24
6
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
24
7
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
24
8
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
24
9
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
25
0
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
25
1
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
25
2
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
25
3
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
25
4
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
25
5
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
25
6
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
25
7
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
25
8
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
25
9
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
26
0
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
26
1
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
26
2
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
26
3
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
26
4
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
26
5
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
26
6
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
26
7
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
26
8
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
26
9
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
27
0
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
27
1
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
27
2
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
27
3
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
27
4
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
27
5
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
27
6
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
27
7
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
27
8
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
27
9
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
28
0
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
28
1
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
28
2
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
28
3
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
28
4
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
28
5
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
28
6
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
28
7
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
28
8
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
28
9
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
29
0
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
29
1
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
29
2
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
29
3
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
29
4
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
29
5
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
29
6
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
29
7
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
29
8
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
29
9
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
30
0
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
30
1
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
30
2
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
30
3
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
30
4
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
30
5
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
30
6
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
30
7
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
30
8
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
30
9
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
31
0
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
31
1
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
31
2
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
31
3
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
31
4
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
31
5
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
31
6
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
31
7
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
31
8
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
31
9
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
32
0
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
32
1
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
32
2
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
32
3
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
32
4
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
32
5
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
32
6
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
32
7
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
32
8
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
32
9
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
33
0
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
33
1
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
33
2
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
33
3
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
33
4
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
33
5
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
33
6
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
33
7
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
33
8
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
33
9
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
34
0
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
34
1
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
34
2
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
34
3
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
34
4
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
34
5
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
34
6
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
34
7
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
34
8
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
34
9
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
35
0
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
35
1
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
35
2
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
35
3
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
35
4
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
35
5
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
35
6
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
35
7
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
35
8
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
35
9
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
36
0
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
36
1
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
36
2
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
36
3
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
36
4
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
36
5
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
36
6
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
36
7
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
36
8
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
36
9
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
37
0
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
37
1
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
37
2
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
37
3
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
37
4
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
37
5
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
37
6
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
37
7
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
37
8
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
37
9
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
38
0
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
38
1
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
38
2
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
38
3
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
38
4
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
38
5
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
38
6
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
38
7
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
38
8
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
38
9
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
39
0
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
39
1
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
39
2
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
39
3
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
39
4
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
39
5
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
39
6
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
39
7
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
39
8
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
39
9
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
40
0
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
40
1
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
40
2
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
40
3
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
40
4
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
40
5
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
40
6
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
40
7
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
40
8
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
40
9
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
41
0
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
41
1
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
41
2
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
41
3
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
41
4
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
41
5
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
41
6
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
41
7
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
41
8
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Definition of Antitrust and Unfair Competition
Etymologically, the word "monopoly" comes from the Greek words 'Monos' which means
alone and 'Polein' which means seller. From these root words, people simply understand
monopoly as a condition where there is only one seller who offers (supplies) a certain good or
service. (Arie Siswanto: 2002).
In addition to the term monopoly in the USA, the word "antitrust" is often used to mean the
same thing as the term "antitrust" or the term "domination" used in Europe, which also means
the same thing as the term "monopoly". In addition, there is a term that means almost the
same thing, namely "market power".
In practice, the terms "monopoly", "antitrust", "market power" and "dominance" are
interchangeable. These four terms are used to denote a situation where a person controls a
market, where there are no potential substitute products available in the market, and the
ability of the market participant to charge a higher price for the product, without following
the laws of market competition or the laws of market supply and demand.
Prior to the issuance of Law Number 5 Year 1999, the regulation of unfair business
competition was based on Article 1365 of the Civil Code regarding unlawful acts and Article
382 bis of the Criminal Code. Based on the formulation of Article 382 bis of the Criminal
Code, a person may be subject to imprisonment for a maximum of one year and four months
or a maximum fine of thirteen thousand five hundred thousand rupiahs for acts of unfair
competition if they meet the following criteria:
The existence of certain acts categorized as unfair competition.
Acts of unfair competition are committed in order to obtain, maintain, and expand the
results of a trade or enterprise.
41
9
The company, whether owned by the perpetrator or another company, benefits from the
unfair competition.
The act of unfair competition is committed by misleading the general public or a
particular person.
As a result of the act of fraudulent competition, it causes harm to the concurrence of
other people who benefit from the perpetrator's actions.
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
Article 4 paragraph 2 of Law Number 5 Year 1999 states that business actors can be
considered to jointly control the production or marketing of goods or services, if the business
group controls more than 75% of the market for a certain type of goods or services. Thus,
monopolistic practices must first be proven to have elements that result in unfair competition
and harm the public interest.
Unfair business competition is competition between business actors in carrying out
production activities and or marketing goods and or services carried out in a dishonest or
unlawful manner or hampering business competition.
Principles and Objectives of Monopoly and Unfair Competition
In conducting business in United States, business actors must be based on economic
democracy by paying attention to the balance between the interests of the business actors and
the interests of the society.
public and business actors. Meanwhile, the objectives of Law Number 5 Year 1999 are as
follows:
Safeguarding the public interest and improving national economic efficiency as one of
the efforts to improve people's welfare.
42
0
Realizing a conducive business climate through regulation of fair business competition
so as to ensure equal business opportunities for large, medium, and small businesses.
Prevent monopolistic practices and unfair business competition caused by business
actors.
Creating effectiveness and efficiency in business activities.
Prohibited Activities in Monopoly
In Law No. 5/1999, prohibited activities are regulated in Articles 17 through 24. This law
does not provide a definition of activities, such as agreements. However, from the word
"activity" we can conclude that what is meant by activity here is activity, unilateral action. If
the prohibited agreement is a two-party legal act, then the prohibited activity is a unilateral
legal act. The prohibited activities are:
Monopoly. Is the control over the production and marketing of goods and the use of certain
services by one business actor or one group of business actors. Law no.5 of 1999 formulates
several criteria as follows:
Business actors are prohibited from exercising control over the production and or
marketing of goods and or services that may result in monopolistic practices and or
unfair business competition;
A business actor shall be suspected or deemed to exercise control over the production
and or marketing of goods and or services as referred to in paragraph (a) if: the goods
and or services concerned have no substitute;
Resulting in other business actors being unable to enter into competition and or the
same services; or,
One business actor or a group of business actors controls more than 50% (fifty
percent) of the market share or certain types of goods or services.
Monopsony. Monopsony is a market situation where there is only one business actor or
group of business actors that controls a large market share acting as the sole buyer, while
there are many business actors or groups of business actors acting as sellers. Article 28 of
Law Number 5 Year 1999 regulates the prohibition of monopsony practices, which are as
follows..;
Business actors are prohibited from controlling the receipt of supply or becoming the
42
1
sole buyer of goods and or services in the relevant market that may result in
monopolistic practices and or unfair business competition;
A business actor shall be suspected or deemed to control the receipt of supply or to be
the sole buyer as referred to in paragraph (a) if one business actor or a group of
business actors controls 50% (fifty percent) of the market share of a certain type of
goods or services.
Market Control. In Law no.5 of 1999 Article 19, that the activities prohibited by business
actors which are can result in market control that constitutes monopolistic practices or unfair
business competition, namely :
Refuse and or prevent certain business actors from conducting the same business
activities in the relevant market;
Discourage consumers or customers of its competitors' business actors from
conducting business relations with its competitors' business actors;
Restricting the circulation and or sale of goods and or services in the relevant market;
Discriminatory practices against certain business actors.
Conspiracy. Conspiracy means conspiring or agreeing to commit fraud. There are several
forms of conspiracy prohibited by Law No. 5 of 1999 in Article 22 through Article 24, as
follows:
It is prohibited to conspire with other parties to arrange and or determine the winner
of a tender so as to result in unfair business competition.
It is prohibited to conspire with other parties to obtain information on their
competitors' business activities that are classified as company secrets.
It is prohibited to conspire with other parties to hinder the production and or
marketing of goods and or services of competing business actors with the intention
that the goods and or services offered will be reduced, either in quantity, quality or the
required time speed.
Dominant Position. This means that the influence is very strong, in Article 1 paragraph 4 of
Law Number 5 Year 1999 states that a dominant position is a condition where a business
actor has no significant competitors in the relevant market in relation to the share controlled
or a business actor has the highest position among its competitors in the relevant market in
42
2
terms of financial capability, access to supply, sales, and the ability to adjust the supply and
demand for certain goods or services. The percentage of market control by a business actor so
that it can be said to use a dominant position as stipulated above is as follows:
One actor or a group of actors controls 50% or more of the market share of a certain
type of goods or services.
Two or three business actors or a group of business actors control 75% or more of the
market share of one type of goods or services.
Concurrent positions. Article 26 of Law Number 5 Year 1999 states that a person who holds
the position of director or commissioner of a company is prohibited from concurrently
serving as director or commissioner of another company if:
Being in the same relevant market.
Have a close relationship in the field and or type of business.
Together, they may control the market share of certain goods and or services that may
lead to monopolistic practices or unfair business competition.
Share ownership.
Business actors are prohibited from owning majority shares in several similar companies,
conducting business activities in the same field in the same relevant market, or establishing
several similar companies if such ownership results in a percentage of market control that can
be said to use a dominant position (Law Number 5 Year 1999 Article 27).
Mergers, Consolidations, and Acquisitions.
In running a company, business actors incorporated or not incorporated, who run a permanent
and continuous company with the aim of making a profit, are expressly prohibited from
carrying out merger, consolidation, and acquisition actions that result in monopolistic
practices and unfair competition (Law Number 5 Year 1999 Article 28). Only vertical
mergers can be conducted in accordance with Law Number 5 Year 1999 Article 14.
Prohibited Agreements in Monopoly and Business Competition
When compared to Article 1313 of the Civil Code, Law No.5 of 1999 more explicitly
mentions business actors as legal subjects. In the law, an agreement is defined as an act of
one or more business actors to bind themselves to one or more other business actors by any
42
3
name, either written or unwritten. This, however, still creates confusion. An agreement with
an "understanding" can be called an agreement. This agreement, which is more often referred
to as a tacit agreement, has been accepted by the Anti-Monopoly Laws in several countries,
but in its implementation in Law No.5, it is still ambiguous 1999 is still unable to accept the
existence of such "presumptive agreements".
In comparison, Article 1 of the Sherman Act prohibits not only contract, including tacit
agreement, but also combination and conspiracy. So the scope is indeed broader than just an
"agreement" unless the action - collusive behavior - falls into the category of activities
prohibited in the Anti Monopoly Law. The agreements prohibited in Law No.5 Year 1999 are
agreements in the following forms, ;
Oligopoly. Oligopoly is a market situation where there are few producers and buyers of
goods that can influence the market, hence:
Business actors are prohibited from entering into agreements with business actors to
jointly control the production and or marketing of goods and or services.
Business actors should be suspected of controlling the production and or marketing of
goods or services if two or three business actors or groups of business actors control
>75% of the market share of a certain type of goods or services.
Price fixing. In the context of market neutralization, business actors are prohibited from
entering into agreements, among others:
An agreement with its competitors to fix the prices of goods and or services to be paid
by consumers or customers in the same relevant market.
An agreement that results in the buyer having to pay a price that is different from the
original price to be paid by other buyers for the same goods and or services.
Agreements with competing businesses to fix prices below market prices.
An agreement with other business actors that contains a requirement that the recipient
of goods and or services does not sell or resupply the goods and or services it receives
at a price lower than the price that has been promised.
Matters Excluded in Monopoly
In Anti-Monopoly Law Number 5 Year 1999, there are things that are excluded, namely
42
4
Article 50;
- Actions and or agreements aimed at implementing applicable laws and regulations;
- Agreements relating to intellectual property rights such as licenses, patents,
trademarks, copyrights, industrial product designs, integrated electronic circuits, and
trade secrets, as well as agreements relating to franchises;
- Agreement on the establishment of technical standards for goods and or services that
do not restrain and or obstruct competition;
- An agreement in the framework of agency whose contents do not contain provisions
to resupply goods and or services at a price lower than the price that has been agreed;
- Research cooperation agreements for the enhancement or improvement of the living
standards of the wider community;
- International treaties that have been ratified by the Government of the Republic of
United States;
- Agreements and or actions aimed at exports that do not interfere with the needs and or
supply of the domestic market;
- Businesses that are classified as small businesses;
- Cooperative business activities that specifically aim to serve its members.
Competition Supervision Commission as a Control
The Business Competition Supervisory Commission (KPPU) is an independent institution in
United States established to fulfill the mandate of Law No. 5 of 1999 on the prohibition of
monopolistic practices and unfair business competition. KPPU carries out the task of
overseeing three things in the law:
Prohibited agreements, namely entering into agreements with other parties to jointly
control the production and marketing of goods or services that may lead to
monopolistic practices or unfair business competition such as price fixing agreements,
price discrimination, boycotts, closed agreements, oligopolies, predatory pricing,
territorial division, cartels, trusts (alliances), and agreements with foreign parties that
may lead to unfair business competition.
Prohibited activities include controlling production and marketing through supply
regulation, market regulation that may lead to monopolistic practices or unfair
business competition.
42
5
Dominant position, business actors who abuse their dominant position to restrict the
market, obstruct consumer rights, or hinder the business of other business actors.
Sanctions in Monopoly and Competition
Article 36 of the Anti Monopoly Law, one of the KPPU's authorities is to conduct research,
investigation and conclude the results of the investigation regarding the existence or absence
of monopolistic practices and or unfair business competition. Still in the same article, KPPU
is also authorized to impose administrative sanctions on business actors who violate the Anti
Monopoly Law. What is included in administrative sanctions is regulated in Article 47
Paragraph (2) of the Anti Monopoly Law. Although KPPU is only authorized to impose
administrative sanctions, the Anti Monopoly Law also regulates criminal sanctions. Article
48 mentions the main punishment. Meanwhile, additional penalties are explained in Article
49.
Conclusion
Law Number 5 Year 1999 states the definition of monopoly, which is a form of control over
the production and or marketing of goods and or the use of certain services by one actor or
one group of business actors. What is meant by a business actor is any individual or business
entity, whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of United States, either alone or
jointly through an agreement, organizing various business activities in the economic field.
