KPPU Developing Credible Competition Regime

A number of recent developments illustrate the challenges the Indonesian competition authority, the KPPU, faces in seeking to achieve compliance with competition law norms in a country with more than 500 local and provincial governments governing people living on 922 permanently inhabited islands speaking 700 different languages. Each of the 500 governments in Indonesia are responsible for substantial public procurement exercises, including the construction of schools, hospitals, public transport infrastructure, municipal buildings, flood drainage projects and other international aid sponsored programs. Fighting bid rigging in public procurement, and corrupt complicity with bid rigging conduct by government officials, continues to be the single top priority of the KPPU. The latest cases concern bid rigging and discriminatory practices in connection with the establishment of a new semitraditional market in East Java Province and a hospital in Southeast Sumatera. The conduct in the former case was facilitated by an industry association and in addition to enforcement activities, the KPPU recommended a number of new initiatives to better supervise the creation of industry associations. In recent years the KPPU has also made more tentative steps into running cases against international companies based on economic, and often more contentious, theories of harm (rather than per se cases). In this vein, the KPPU has made a ruling against a major Western energy company in relation to conduct concerning an export...