Draft Bill on Anti-Monopoly Refines Market Share Threshold Provisions

Indonesia’s House of Representatives (“DPR RI”) continues the process of drafting the Draft Bill (“Draft Bill on Anti-Monopoly”) on the Third Amendment to Law No. 5 of 1999 on Prohibition of Monopolistic Practices and Unfair Business Competition (“Law 5/1999”). The provisions on market share thresholds are among the key areas currently undergoing refinement.

In his submission to the Working Committee (“Panja”), Sahala Benny Pasaribu, a member of the Advisory Board of the Business Competition Supervisory Commission (“KPPU”), stated that the Draft Bill should not make the level of market control the sole indicator of a business competition violation. Such an approach is considered capable of overlooking anti-competitive conduct, which in fact constitutes the core substance of competition law enforcement.

“Market share thresholds are only secondary; they are not the core element, nor the substance of competition law enforcement. Market share only concerns market structure. That is not the essence,” he told Hukumonline.

According to him, companies with relatively small market shares may still create anti-competitive effects if they engage in practices such as cartel arrangements, creating barriers to entry, or engaging in predatory pricing. Therefore, the assessment of violations should be focused more on conduct that harms competition, rather than solely on market share size. He encouraged further refinement of several provisions in the Draft Bill relating to market share thresholds.

In the Draft Bill document obtained by Hukumonline, Article 25 and Article 27 set out certain threshold requirements. Article 25 continues to determine a dominant position based on market share control of 50% or more. Meanwhile, Article 27 maintains a share ownership threshold of 50% to 75% as one of the indicators of monopolistic practices.