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Mar

16

Mergers and acquisitions in Indonesia have increased significantly in 2020 and 2021. Does this lead to monopolistic practices and unfair business competition?

The Commissioner of the Business Competition Supervisory Commission or Komisi Pengawas Persaingan Usaha (“KPPU” ), Ukay Karyadi, stated that mergers and acquisitions in Indonesia have increased significantly in 2020 and 2021. It was noted that in 2019, the number of notifications of mergers and acquisitions was 123, rising to 196 notifications in 2020 and 233 notifications in 2021.

According to Law No. 40 of 2007 regarding Limited Liability Companies, a merger is a legal action taken by one or more companies to merge with another existing company, which causes the transfer of assets and liabilities of the merging companies to the remaining company. Afterwards, the legal entity status of the merging company ceases by law. The acquisition is defined as a legal action conducted by a legal entity or an individual to acquire the company’s shares, resulting in the transfer of control of the company.

However, based on Law No. 5 of 1999 regarding Prohibition of Monopolistic Practices and Unfair Business Competition ( “Law 5/1999” ), there are various kinds of restrictive agreements and prohibited behaviors, one of them is Mergers and Acquisitions. Thus, if the resulting company executes the following, the resulting merger is considered monopolistic behavior and/or unfair business competition:

  1. Prohibited agreements, for example oligopoly practices, price fixing, division of territory, boycotts, cartels, trusts, oligopsony, vertical integration, closed agreements, agreements with foreign parties (Articles 4 to 16 of Law 5/1999).
  2. Prohibited activities, such as monopolistic practices, monopsony practices, market control, conspiracy (Articles 17 to 24 of Law 5/1999).
  3. Abuse of dominant position, for example, concurrent position or sharing ownership in several similar companies (Articles 25 to 27 of Law 5/1999).

It should also be emphasized that if the merger action is found to have resulted in monopolistic activities and/or unfair business competition, KPPU has the ability to impose administrative sanctions on the business actor. Administrative penalties include the termination of the merger and/or a fine ranging from IDR 1 billion to IDR 25 billion (Article 47 paragraph (2) of Law 5/1999). In addition, a fine of IDR 25 billion to IDR 100 billion or a maximum of 6 months’ imprisonment instead of a fine might be imposed (Article 48 paragraph (1) of Law 5/1999).

Therefore, a merger can lead to monopolistic practices and unfair business competition, but the action is not automatically prohibited by Law 5/1999. In addition, to examine the existence of monopolistic practices and unfair business competition in merger and acquisitions practices, it is also necessary to have an accurate assessment to determine the presence or absence of these monopolistic practices and unfair business competition.

Schinder Law Firm has had years of experience in mergers and acquisitions. Should you wish to carry out these matters, and especially if you have concerns in relation to monopolistic practices and unfair business competition, feel free to drop us an email at info@schinderlawfirm.com.

Author: Dewi Susanti

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Dear valued Visitor,

Data is a valuable currency in this new world. In the midst of digital transformation, the Indonesian government has taken the final decision to pass the Pelindungan Data Pribadi (PDP) Bill by September 2022. The PDP Law applies to all businesses established in Indonesia and puts the consumer in control. The task of complying with this regulation falls upon businesses.

The PDP Law affects a variety of business operations, including how your sales team prospect and how marketing initiatives are managed. Businesses have had to reassess their business procedures, applications, and forms. Additionally, all businesses that work with personal data should designate a Data Protection Officer (DPO) or data controller to oversee PDP compliance.

In line with this spirit, it gives us great pleasure to announce and share with all our esteemed clients and business associates that Schinder Law Firm is prepared to assist your company to understand the impacts of the Personal Data Protection Law (PDPL) and take the required measures to comply with the law. Our Privacy, Data Protection, and Cybersecurity practice group is a pioneer in providing data privacy law services in Indonesia. Personal data protection services include but are not limited to:

  • Assessing the existing systems, processes, and controls, etc.
  • Providing provide gap assessment on the existing systems, processes, and controls, etc.
  • Developing and ensuring contracts and agreements comply with the PDP Law
  • Developing policies, best practices, and procedures
  • Advising on the security of personal data and managing data breaches
  • Acting as the Data Protection Officer (DPO) and advising upon the appointment, role, and responsibilities of a data protection officer
  • Advising on cross-border transfers of personal data
  • Carrying out data protection impact assessments and data protection audits
  • Recommending other necessary corrective actions in order to comply with the PDP Law
  • Training on the PDP Law tailored to clients’ businesses

We look forward to many more opportunities in the year ahead with your continued support and trust. For consultation, please send us a WhatsApp or Email.

Warmest regards,
Naz Schinder
Managing Partner

Keep Up with the New Law in Indonesia: Personal Data Protection

  • Assessing the existing systems, processes and controls, etc.
  • Providing provide gap assessment on the existing systems, processes and controls, etc.
  • Developing and ensuring contracts and agreements comply with the PDPL.
  • Developing policies, best practices and procedures.
  • Advising on security of personal data and managing data breaches.
  • Acting as the Data Protection Officer (DPO) and advising upon the appointment, role and responsibilities of a data protection officer.
  • Advising on cross-border transfers of personal data.
  • Carrying out data protection impact assessments and data protection audits.
  • Recommending other necessary corrective actions in order to comply with the PDPL.
  • Training on the PDPL tailored to clients’ businesses.
Privacy, Data Protection and Cyber Security
We help our clients to understand the impact of the Personal Data Protection Law (PDPL) on their companies and take the required measures to comply with the law.