After a lengthy drafting process, and some 11 years from the issuance of the Law No. 5 of 1999 (the “Anti-Monopoly Law”), an implementing regulation of Articles 28 (3) and 29 (2) of Anti-Monopoly Law were released through Government Regulation No. 57 of 2010 (the “Regulation”) which has been in force since 20 July 2010.
The Regulation sets out the sizes of mergers and acquisitions that, upon conclusion, must be notified to the Commission for Supervision of Business Competition (Komisi Pengawas Persaingan Usaha - “KPPU”).
As contained in Article 5 (1 & 2) of the Regulation, any merger or acquisition that meets more than the following size-related criteria will need to be notified to the KPPU within 30 business days of legally-effective conclusion:
- IDR 2.5 trillion total value of assets, and / or;
- IDR 5 trillion value of sale.
For the banking sector, however, mergers and acquisitions need only be notified to the KPPU if the value of assets is greater than IDR 20 trillion.
The KPPU will provide a form for the notification; it will require information listed in Article 8 (2 & 3). The KPPU will assess the notification, and, within 90 days of reception, issue a decision as to whether or not the merger or acquisition is approved with respect to the Anti-Monopoly Law (i.e., with respect to majority control of a given market, and / or unfair, inefficient, illegal, or otherwise problematic market activity).
Voluntary pre-notification to the KPPU of a prospective merger or acquisition is still possible, and will not have legal repercussions: it may be used to ascertain the extent of legal certainty of an arrangement (i.e., the probability of post-transaction anti-trust proceedings).
Administrative sanctions may be imposed on businesses that fail to notify the KPPU of transactions above the regulated size: Article 6 allows a sanction of IDR 1 billion per day, up to a maximum of IDR 25 billion.