Apart from enforcing competition law, the Indonesia Competition Authority (Komisi Pengawas Persaingan Usaha or “KPPU”) also supervises partnership agreements between large/medium businesses and their micro, small, or medium enterprise (“MSME”) partners. If a large/medium business is found to have ownership or control over its MSME partners, the KPPU can initiate a case against the business and impose administrative sanctions.
For several years, the KPPU has diligently focused on MSME partnerships. The recent issuance of a new regulation in this field underscores their unwavering commitment to this area. This regulation, KPPU Regulation No. 2 of 2024 on the Procedure and Case Handling of Partnership Cases (“New Regulation”) was issued in April 2024, and replaces KPPU Regulation No. 4 of 2019 on the same topic.
The highlights of the New Regulation are as follows:
- Enhanced clarity on the duration of the written warning stage, which gives more room for the reported party to implement the KPPU’s order.
- Partnership cases now adopt stricter requirements for evidence, like competition cases.
- Reported party has a more limited room to rebut the allegations.
- There is a lack of clarity of whether KPPU’s decisions in partnership cases are final.
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