The Rise of Indonesia’s Antitrust Body

The Indonesia’s Antitrust Regulatory Body, KPPU, sentenced Singapore-owned Temasek to divest its 15% share in one of its Indonesia’s telecommunication companies of either Indosat or Telkomsel early this year. KPPU concluded that Temasek had practiced monopoly in the industry due to its more than majority shareholding which consequently implicated the whole market share. Indosat and Telkomsel are the biggest telecommunication companies in Indonesia.

The “battle” between KPPU versus Temasek is still going on now in the court. Not only that. Regardless the controversy of the case above, KPPU seems to now showing its muscle in regulating other similar industries as well.

Having managed to sentence Temasek, the regulatory body run by young idealists are now investigating some national mobile companies as well such as XL, Telkomsel, Indosat (again), and others. It indicated that these companies  are playing the game of cartel in setting high prices for short message services (SMS). It was found out that all SMS cost should only bear for Rp 75 (S$ 0.01), not Rp 350 (S$ 0.04) as at present operated.

Still in the similar industry, KPPU has been receiving some reports that Indonesia’s over-the-air television owners have trespassed the law of cross-ownership. Ten national private television stations (RCTI, TPI, GlobalTV, SCTV, Indosiar, ANTV, Lativi, TransTV, Trans7, and MetroTV) are only almost all owned by three big groups of MNC, Bakrie, and Fofo only. Furthermore, they also cross-own other businesses such as radios, newspapers, magazines, cable TVs, and also telco services. KPPU is still verifying and seeking for the best method to see if the accusation is necessary to follow up.

It does not stop here. There has been concern nowadays that traditional markets in cities have been eroded by the rapid existences of hypermarket such as Carrefour. It is thought that the biggest retail company is now leading the trend towards monopoly. And again, KPPU is very likely to proceed for further verification as well.

In short, giants like telco companies and retail corporation in Indonesia are now facing the challenge from the previously-underestimated antitrust body KPPU. I see that such regulatory body’s power in Indonesia is emerging now. Its rising might make sense. Public, such as mobile users, TV viewers, farmers, local traders, feel nowadays that expecting the government and parliament to act for them and protect their interests is hopeless. Their turn to such regulatory body such KPPU is now becoming a hope – borrowing Obama’s favorite term 🙂

Regulatory bodies like KPPU are not alone. KPK – Anti Corruption Commission agency- is doing its job now (although wishy washy targeting the big fish). KPI – regulatory body for broadcast industry – is showing its existence having received so many complaints from viewers of television contents of violence, horror, and pornography. And still some other similar agencies for regulatory purposes.

It shows the irony of democracy. People are moving away from the democratic institutions (governments, members of parliament) that they themselves have voted for. They now move to trust such regulatory bodies which basically are not democratically-and-directly elected by themselves. This is perhaps what Robert Dahl mentioned once as the “inborn flaw of democracy”. Wallahualam bishawab.


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