Dampak PutusanPutusan KPPU terhadap Dunia Usaha dan Industri Indonesia dan Kondisi Kebijakan Persain

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Dampak Putusan-Putusan KPPU terhadap Dunia Usaha
dan Industri Indonesia dan Kondisi Kebijakan
Persaingan Usaha Nasional
Setio Anggoro Dewo PhD Magister Akuntansi FEUI
Disampaikan pada Panel Diskusi Competition Law
Practice Achievements Challenges Mahkamah
Agung, KPPU dan GTZ Jakarta, 20 Desember 2006
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Agenda

• Introduction
• Theories of Antitrust Enforcement
• KPPU decisions are effective in changing firm
  behavior if
• Antitrust Law affects businesses and industries
• Implementation of UU No.5/1999 for 2007 onward

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Introduction

• Should market forces or government regulation be
  used to shape up economic development?
• Competition as Institution needs protection

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Agenda

• Introduction
• KPPU decisions are effective in changing firm
  behavior if
• Antitrust Law affects businesses and industries
• Implementation of UU No.5/1999 for 2007 onward

• Theories of Antitrust Enforcement

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Theories of Antitrust Enforcement

• Structure theory
• Performance theory
• Steiner, George. A., dan John. F. Steiner,
  Business, Government, and Society , McGraw-Hill,
  10th ed., 2003

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The Structure Theory

• The theory focuses on
• 1. corporate size and
• 2. market share.
• The essence of the theory to ensure competitive
  markets is to break up concentrations of economic
  power or prevent such concentration from
  developing.

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The Performance Theory

• The theory argues that public policy should seek
  efficient business performance as well as
  appropriate market structure.
• The theory considers world market/foreign
  competitors when defining relevant market and
  players in the industry
• Supported by evidence from empirical research
  Weston, J.F., Concentration and Efficiency,
  Croton on Hudson, NY, Hudson Institute, 1978

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Research findings

• Weston, J.F., Concentration and Efficiency,
  Croton on Hudson, NY, Hudson Institute, 1978
• Lack of correlation between measures of
  concentration and excessive profits.
• Substantial price flexibility exists in
  concentrated industries and that price increases
  during inflationary periods have been lower in
  industries dominated by super concentrations than
  in those less concentrated.
• Productivity has risen faster industries that are
  concentrated than in other industries.
• If high profits are found in large firms and high
  concentration due more to efficiency than any
  market power they posses (also by Demsetz, H,.
  Industry Structure, Market Rivalry, and Public
  Policy, Journal of Law and Economics, XVI, April
  1973, p.1-9 Round, D.K., Industry Structure,
  Market Rivalry, and Public Policy Australian
  Evidence, Journal of Law and Economics, XVI,
  April 1975, p.273-281) .

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Agenda

• Introduction
• Theories of Antitrust Enforcement
• Antitrust Law affects businesses and industries
• Implementation of UU No.5/1999 for 2007 onward

• KPPU decisions are effective in changing
• firm behavior if

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KPPU decisions are effective in changing firm
behavior if ..

• No political intervention
• More focus on competition issues based on strong
  theoretical foundation, supported by robust
  empirical research and conducted with good and
  sound analysis
• Severe (how to measure detrimental effect as a
  basis for determining penalty)
• Consistent/irreversible and fair/adil (such as it
  affects all firms and no discrimination)
• Credible (such as substance over form,
  consistent, strong enforcement)

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Agenda

• Introduction
• Theories of Antitrust Enforcement
• KPPU decisions are effective in changing firm
  behavior if
• Implementation of UU No.5/1999 for 2007 onward

• Antitrust Law affects businesses and
• industries

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Some of KPPU features decisions

• KPPUs human capital integrity
• KPPUs responsiveness to reports
• KPPU efforts for regional cooperation
• ABC vc Panasonic Interbrand competition
• -/Yamaha Intrabrand competition without market
  power, access to market, protection to SME?
• Semen Gresik (SG) Business common practices in
  the industry SG fined, not others
• Astro Foreclosure Star networks, satellite
  unequal playing field/not reciprocal between
  Malaysia Indonesia, monitoring on Astro and
  Star networks
• PGN tender on Palija Quality competition first,
  price competition second (DNV certification)
• Carrefour Penalty (minus margin) on price
  discrimination done by its suppliers
• Holdico Tender result with low price
• Indomaret Weak competition substance decision
  (coordination with city planning), no protection
  to small warungs
• Riau tender vertical collusion is a corruption
  issue, not competition issue

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Antitrust Law Effects on Businesses and
Industries

• A. Structure
• B. Conduct
• Degree of competitiveness
• More companies do proper behavior
• More difficult to create barrier to entry and
  exit
• C. Performance
• Efficient
• Optimal allocation of resources
• Technical progress
• No persistence of abnormal profits
• Economic welfare
• Nurturing and protection of SMEs
• Unemployment other social costs
• Lower inflation due to more difficult in
  coordinating price policy
• Flourished strong domestic companies which are
  able to compete in regional and global market
• Competition law consistent to national interests
  such as industrial policy
• More healthy industries

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Agenda

• Introduction
• Theories of Antitrust Enforcement
• KPPU decisions are effective in changing firm
  behavior if
• Antitrust Law affects businesses and industries

• Implementation of UU No.5/1999 for 2007
• onward

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Implementation of UU No. 5/1999 for 2007 onward
(1)

• A. Amend UU No.5/1999
• B. Based on two premises
• Open competition is the only process to
  containment of government.
• Open competition is not only desirable, not only
  feasible, but naturally robust.
• However,
• We should take into consideration how we should
  nurture SMEs and develop strong domestic
  companies

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Implementation of UU No. 5/1999 for 2007 onward
(2)

C. Social issues and competition policy 1.
Freedom of competition and property rights 2.
Financial markets and market competition 3.
Public policy (industrial policy, OTDA,
anti-smuggling) and competition policy 4.
Competition policy and international trade
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Implementation of UU No. 5/1999 for 2007 onward
(3)
D. Homeworks 1. Hire a professional chief
economist 2. Promotion to business
associations 3. Software procurement to
government institutions 4. Distribution sugar,
fertilizer

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• Thank You