In theory, the Indonesian Anti-Monopoly Law provides for a broad range of exemptions. Article 50 of the law exempts the following acts or agreements:
(a) actions and agreements that are mandated by law;
(b) agreements related to intellectual property rights (IPR) and franchising;
(c) agreements to set technical standards for products, provided these agreements do not restrict or obstruct competition;
(d) agency agreements, as long as they do not provide for resale price maintenance;
(e) agreements for research co-operation for the purpose of promoting or improving the standard of living of the general public;
(f) international agreements;
(g) agreements and/or actions relating to exports that do not affect the Indonesian market; and
(h) acts of cooperatives carried out in servicing their members.
In practice, the Indonesian Business Competition Supervisory Commission (Komisi PengawasPersaingan Usaha), or KPPU, has taken a restrictive view of these exemptions. In its decisions on cases where defendants have used Article 50 as a defense, the KPPU has ruled that the article does not apply.
In 2008, the KPPU issued a guideline on exemptions to Article 50(a), which provides that to qualify as being mandated by law, the agreement must be specifically required by a law (undang-undang) - an act passed by the Indonesian House of Representatives. This is very unlikely to happen.
Recently, the KPPU has shown further signs of its restrictive views. In early March 2009, it issued two draft guidelines on the application of Article 50(b), which would, in effect, subject all licensing and franchising arrangement to both traditional antitrust scrutiny and public interest tests.
The first draft is a draft guideline on IPR-related agreements. This draft applies mainly to licensing agreements, whereby a licensor issues licenses for the use of its IPR to a licensee. On this point, the KPPU’s position (according to the draft) can be summarised as follows:
n The KPPU notes that the Copyright Law and other Indonesian laws on IPR provide that licensing contracts must not have a negative effect on competition or the public interest. Paradoxically, where the Anti-Monopoly Law appears to exempt licensing agreements, the Copyright Law and other IPR laws open the door to unfair competition analysis. The draft confirms that the KPPU is of the view that all licensing contracts should be subject to fair competition analysis.
n In fact, the KPPU goes even further. The draft states that all IPR licensing contracts should also respect the balance between the interests of the licensor and those of the public. Thus, the KPPU signals that its analysis will have a broad scope; encompassing not just usual anti-trust analysis (barrier to entry, dominance) but also other as-yet-undefined public policy issues.
The second draft is a draft guideline on franchising. Essentially, it states that any exemption for franchising contracts is restricted solely to the IPR aspects of those contracts. This view seems to ignore the text of Article 50(b), which appears to read that all aspects of franchising are exempt, not just the IPR aspects.
Further, given that licensing is at the heart of franchising contracts, it appears clear when one reads the text of the two drafts together, that all aspects of franchising contracts will be subject to the KPPU’s scrutiny.
The original Indonesian text of the two draft guidelines is available on the KPPU’s website at www.kppu.go.id, and interested parties may submit comments on the drafts to the KPPU until early April 2009.
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Hadiputranto Hadinoto & Partners
Mochamad Fachri
Tel: +62 21 515 4884
E-mail: mochamad.fachri@bakernet.com
Nathaniel O.L. Mangunsong
Tel: +62 21 515 5090
E-mail: nathaniel.ol.mangunsong@bakernet.com
Website: www.hhp.co.id |