Client COVID-19 INSIGHTS CENTER/ Newsflash
KPPU: Law Enforcement Through Electronic Means
On April 6, 2020, the Indonesia Business Competition Supervisory Commission (Komisi Pengawasan Persaingan Usaha or “KPPU”) issued the (i) KPPU Regulation No. 1 of 2020 dated April 6, 2020 on Case Handling Electronically (“KPPU Reg. 1/2020”); and (ii) KPPU Decree No. 12/KPPU/Kep.1/IV/2020 dated April 6, 2020 on Case Handling in the event of an Emergency Disaster due to the COVID-19 Outbreak in Indonesia (“KPPU Decree 12/2020”). These two policies are issued by KPPU in relation to the Large-scale Social Restrictions (Pembatasan Sosial Berskala Besar or “PSBB Policy”) ordered by the Indonesian Government due to the COVID-19 outbreak in Indonesia.
These two policies aim to address concern over limitations for KPPU in conducting supervision and law enforcement duties due to the issuance of the PSBB Policy. Pursuant to KPPU Reg. 1/2020 and KPPU Decree 12/2020, KPPU has the ability to implement supervision and law enforcement through Electronic Media. KPPU Reg. 1/2020 defines Electronic Media as all electronic interaction facilities used by KPPU, not limited to the visual teleconference and electronic mail (e-mail).
We also note that while KPPU Reg. 1/2020 is indeed issued during the COVID-19 outbreak in Indonesia, this regulation enables KPPU to further conduct its law enforcement effort through electronic means outside the context of this pandemic, which allows more efficiency in the competition law sector.
Important issue contained in KPPU Decree 12/2020 is as follows:
- Recommencement of Law Enforcement Activities by KPPU while Prioritizing the Use of Electronic Media
The KPPU Decree 12/2020 revokes two previous decrees: KPPU Decree 10/2020 and KPPU Decree 11/2020, which were issued to suspend the law enforcement activities by KPPU from March 17 to April 6, 2020. The revocation of these two Decrees recommences all previously suspended law proceeding at KPPU upon the issuance of KPPU Decree 12/2020 on April 6, 2020.
In conjunction with the recommencement of law enforcement activities, KPPU Decree 12/2020 further mandates for law enforcement activities to prioritize the use of electronic media. While the use of electronic means is in line with the PSBB Policy for physical distancing, because the mandate under this KPPU Decree 12/2020 is only to prioritize but not migrate all law enforcement activities to electronic media, KPPU may still be able to conduct face-to-face legal proceedings.
Meanwhile, key policies contained in KPPU Reg. 1/2020 are as follows:
- Notification Assessment and Partnership Supervision
Through KPPU Reg. 1/2020, all written notification to be submitted to KPPU may be conducted by way of Electronic Media. These notifications consist of written consultation notification, assessment, KPPU opinion, notice stipulation, as well as partnership supervision. All rules concerning these written notifications will still refer to the KPPU regulations on assessment for post-acquisition/merger notification obligation as well as regulations on partnership supervision currently in force.
- Implementation of Legal Proceedings for Anti-Trust Matters through Electronic Media
KPPU Reg. 1/2020 further provides mechanisms to conduct legal proceedings for examination of late submission for mergers and acquisition notification requirement, examination of alleged violation of partnership agreements, and other anti-trust cases through Electronic Media. In conducting these legal proceedings, KPPU introduces Electronic Domicile, where KPPU regards an e-mail address as official domicile for parties involved in legal proceedings with KPPU. This determination of Electronic Domicile allows KPPU to send hearing summons and conduct other hearing correspondences to and using this Electronic Domicile. Further, hearings will be conducted through the Electronic Media.
Although KPPU Reg. 1/2020 does not specify the Electronic Domicile of KPPU in conducting examination of late submission for M&A notification requirement, examination for alleged violation of partnership agreement, as well as other anti-trust cases, KPPU website does provide guidance that submission of report for alleged violations to be submitted through ‘firstname.lastname@example.org’, while clarification and consultation to be submitted through ‘email@example.com’.
KPPU Reg. 1/2020 also provides that the panel of judges in a legal proceeding may render its decision through Electronic Media, and that any decision rendered using this method is legally deemed to have been read in a public hearing that is attended by the parties. After announcement of KPPU decision for a particular proceeding, KPPU may publish the copy of its decision and conduct enforcement of such decision through Electronic Media as well.
The KPPU Reg. 1/2020 is a highly appreciated initiative from KPPU to allow a more efficient conduct of its authorities and the process of its law enforcement activities especially during this pandemic situation. However, as in many other new systems being developed, there will be questions from both practical and theoretical aspects in performing legal proceedings through electronic means. One of them, for example, is the procedure for cross-examinations during the proceedings. For this reason, it will be crucial for KPPU at this stage to provide further guidance on the procedures as well as good communication to ease the legal enforcement process using the Electronic Media, so that the intention of the KPPU Reg. 1/2020 can be well delivered.
April 15, 2020
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