Enforcement Against Foreign Companies Arising from Amendments to Indonesian Competition Law Hinted at by Indonesian Business Competition Supervisory Commission (KPPU) Chair

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The Chair of the Indonesian Business Competition Supervisory Commission (the KPPU), Syarkawi Rauf, has hinted at “taking action against foreign companies” that violate Indonesian Competition Law (Source: PaRR, 26 January 2018). This follows from the extra-territorial jurisdiction provisions provided in the proposed amendments to the country’s competition laws which have been approved by the Indonesian Parliament on 28 April 2017 (the Bill).

Currently pending before Indonesian President Joko Widodo, the Bill extends the definition of “business actors” to include companies established outside Indonesia with activities that affect the Indonesian economy. At present, this is limited to business actors located within Indonesia. 

Once passed into law, the amendments mark a significant milestone for the KPPU which has already indicated its desire to resume its probe into Singapore-based freight forwarding firms in Batam. This development is likely to significantly impact the commercial practices of multi-national companies active in Indonesia even if they are physically located outside Indonesia. 

The move by the KPPU is consistent with the competition law practices in other regional jurisdictions. Singapore’s Competition Act (Cap. 50B), for example, similarly prohibits any anti-competitive conduct which has the effect or object of preventing, restricting or distorting competition in Singapore and this extends to conduct taking place overseas. This is evident by the Competition Commission of Singapore’s various record-breaking penalty decisions against international cartels where the offending conduct had taken place overseas but which conduct had ultimately affected competition in Singapore. 

As competition authorities continually seek to expand the ambit of their enforcement powers, multi-national companies and businesses are now no longer sheltered behind “jurisdictional safe houses” and must continuously review their business practices to ensure alignment and compliance with the competition legislation in every jurisdiction in which they operate. Audit and compliance efforts must be similarly stepped up to ensure relevance with the prevailing competition laws as well.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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