Indonesia’s antitrust authority is urging lawmakers to adopt mandatory pre-merger notifications and stronger powers to police digital markets as parliament debates major updates to the country’s decades-old competition law.
Indonesia’s antitrust regulator is pushing for a shift to a mandatory pre-merger review regime and for broader powers to be included in amendments to the country’s 26-year-old competition law now being debated in parliament.
The Indonesian Competition Commission, or KPPU, also wants lawmakers to introduce an extraterritorial principle and add explicit provisions targeting unhealthy practices in digital markets to the 1999 Law on the Prohibition of Monopolistic Practices and Unhealthy Business Competition.
“It is time for Indonesia to adopt a mandatory pre-merger notification regime as it gives greater certainty to business players,”
KPPU Deputy Chair Aru Armando told a press conference on last Wednesday.
He said the current post-merger notification system was created about 25 years ago, a time when the economy was still in crisis and several companies collapsed or had to merge or be acquired. Under those conditions, post-merger notification was considered the right model.
Today, he said, the economy has stabilized and the post-merger regime is no longer suitable.
"Business players want more legal certainty and mandatory pre-merger notification provides that,"
Armando said.
A pre-merger system, he explained, would allow companies to pause, modify or cancel their deals if the transaction risked creating monopolistic power, avoiding the expense of completing a merger or acquisition only to later face sanctions or, in the worst case, see it unwound by the regulator.
A KPPU spokesperson told a recent conference that the current post-merger system also limits the regulator's ability to block potentially anticompetitive deals.
When asked about the rumored merger talks between Indonesian super app GoTo and Singapore-based rival Grab, Armando declined to comment but confirmed the KPPU is studying it.
“We are conducting an internal study on the merger talks between GoTo and Grab, but we are not in the position to issue a statement,”
he said.
Extraterritorial principle
Armando said another key change in the law is the need to include an extraterritorial principle to strengthen legal certainty.
"The KPPU is also trying to cadopt the extraterritorial principle. What does that mean? It means that foreign businesses can also be investigated and punished by the KPPU,"
he said.
Many countries, he said, have adopted this principle, so Indonesia needs to follow suit to protect national interests.
He added that enforcement against foreign businesses is already applied in practice in some cases, although it is not explicitly regulated. A clearer legal basis is still needed to avoid future ambiguity.
Digital market monopoly
Armando said the regulator is also pushing to include provisions on digital-market monopolies in planned amendments. The current law does not specifically address monopoly practices in digital markets through algorithms.
He said the move follows the KPPU’s study of a new “invisible threat.”
“Cartels are no longer found in hotel meetings, but rather algorithms that can read and adjust prices without human contact. This phenomenon is evident in e-commerce platforms, online mobility and ticket services, logistics and digital advertising,”
he said.
Algorithmic collusion, he said, is the “most dangerous form of cartel” because it is fast-moving, hard to prove and can operate on a national or global scale. The KPPU has therefore made algorithmic collusion a new priority for digital oversight and included it in the amendment.
Unhealthy digital practices also include self-preferencing by large platforms. Such platforms may use data to steer searches toward their own products, exclude micro and small-medium enterprises from rankings and limit competitors’ access to data.
“If left unchecked, self-preferencing will create digital collusion that will sooner or later eliminate MSMEs in Indonesia,”
he said.
For this reason, he said the KPPU is strengthening its digital market oversight and several potential new digital cases are currently being examined.
Source: MLex
