Indonesian flight ticket cartel decision: A positive signal for businesses?

28 July 2020

On 23 June 2020, the Indonesian Competition Commission (Komisi Pengawas Persaingan Usaha or “KPPU”) decided Case No. 15/KPPU-I/2019 on Alleged Violations of Articles 5 and 11 of Law No. 5 of 1999 relating to Scheduled Domestic Commercial Passenger Class Air Transportation Services (“Decision”).

In the Decision, KPPU determined that Garuda, Citilink, Sriwijaya Air, NAM Air, Batik Air, Lion Air and Wings Air (“National Airlines”) had breached the prohibition on price fixing under Law No. 5 of 1999 on Prohibition of Monopolistic and Unfair Business Competition Practices. However, instead of imposing monetary penalties (of up to IDR 25 billion - approximately US$1.7 million), KPPU instead ordered the National Airlines to notify KPPU of any future internal policies they may make that could impact business competition in the airline industry, and to provide information on ticket prices paid by consumers, for a two-year period.

In contrast to other KPPU price fixing decisions that have usually resulted in monetary penalties, the Decision sends a positive signal that KPPU is willing to consider alternative penalties for price fixing violations.

This is an extract of an article by Soemadipradja & Taher, an Indonesian law firm with which Allen & Gledhill has a strategic alliance. To read the full article from the Soemadipradja & Taher website www.soemath.com, please click here.