Indonesian competition law reform in anticipating the single market under the ASEAN Economic Community (AEC)

Abstract

One aspect that is important to be assessed in line with the implementation of the ASEAN Economic Community (AEC) is the regulation of business competition, which in Indonesia is set forth in Law No. 5 of 1999 concerning Prohibition of Monopolistic Practices and Unfair Business Competition. This aspect is important, considering that one of the goals of the AEC is the establishment of an integrated and competitive ASEAN single market. In addition, the implementation of AEC will undoubtedly make the business condition in Indonesia marked by competition among domestic as well as foreign business actors, particularly from ASEAN member countries which can easily establish the business in Indonesia by utilizing the AEC. Consequently, there is an urgent need for Indonesia to ensure that Indonesian competition law meets the following qualifications: (a) contains provisions capable of effectively anticipating and regulating business competition involving foreign business actors (mainly from the ASEAN member countries), so that the ideal competitive environment can be realized in line with the commitments of the AEC; And (b) contains provisions that are compatible with the general principles of ASEAN business competition policy and law as outlined in the ASEAN Regional Guidelines on Competition Policy. This paper is intended to provide input for reform of Law No. 5 of 1999 by identifying the weaknesses vested in the current law in anticipating the AEC.