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entering the relevant market.
In this regards, companies shall have a
dominant position in the following events:
• if one company or a group of companies
controls over 50% (fifty per cent) of the market
segment of a certain type of goods or services;
or
• if two or three companies or a group of
companies control over 75% (seventy-five per
cent) of the market segment of a certain type of
goods or services.
Chapter 5 includes further provisions that intend
to avoid the concentration of market power to
become a dominant position, such as article 26 on
the prevention of a multiple position of directors
and commissioners in companies that are in the
same relevant market, are closely related in the
scope of business or can jointly control the market
share of 50%. Furthermore, article 27 prohibits
companies from owning majority shares in several
similar companies conducting business activities in
the same field on the same market, or establishing
several companies with the same business activities
on the same market, if such ownership causes
a dominant position in accordance with the
definitions of Article 25 of Law 5 of 1999 (above).
In order to avoid dominant positions, Law 5 of 1999
also provides rules on mergers, consolidations and
acquisitions under articles 28 and 29. Furthermore,
there are specific government regulations on
mergers in place.
4. Exclusion
According to article 50 of Law 5 of 1999, several
contacts and activities are excluded from the scope
of Law 5 of 1999. Among others the following
exclusions from the provisions of Law 5 of 1999 are
in place:
• contracts related to intellectual property rights
such as license, patent, trade brand, copy right,
industrial product design, integrated electronic
series, and trade secrets, and contracts related to
franchise; or
• contracts and/or actions intended for export
which do not distract domestic needs and/or
market supply.
5. Sanctions
Law 5 of 1999 stipulates administrative and criminal
sanctions.
Article 47 stipulates several administrative
sanctions, among others:
• revoking contracts governed by chapter 3 of Law
5 of 1999 (article 47 (a));
• ordering companies to stop activities proven to
have been causing monopolistic practices and or
unfair business competition and or being harmful
to society (article 47 (c));
• ordering companies to stop the misuse of
dominant position (article 47 (d));
• stipulation of compensation payment (article 47
(f); and/or
• imposition of a minimum fine of IDR
1,000,000,000 and a maximum fine of IDR
25,000,000,000 (article 47 (g)).
Next to the administrative sanctions, criminal
sanctions shall apply in accordance to article
48 of Law 5 of 1999. Depending on the specific
violation of a prohibition, Law 5 of 1999 imposes
fines between at least IDR 5,000,000,000 up to IDR
100,000,000,000 or imprisonment with a maximum
of five to six months. Furthermore, criminal
sanctions also apply if suspected companies are not
supporting the investigations in accordance with
article 41 of Law 5 of 1999. In this event, a fine of
minimum IDR 1,000,000,000 to a maximum of IDR
5,000,000,000 or imprisonment of a maximum of
three months can be imposed.
