Shifting Legal Approach Implementation Within A Tying Clause Under The Dealership Agreement

Abstract

This research examines the application of the legal approach implemented by the Commission for Business Competition (“KPPU”) toward the alleged violation of the tying agreement under Article 15 paragraph (2) of Law Number 5 Of 1999 in the dealership agreement. This research also examines the exemption criteria in the dealership agreement because of the relation with the license agreement of intellectual property rights in Article 50 letter b of Law Number 5 Of 1999 using a normative-juridical and case study approach. This study concludes several results. Firstly, in Article 15 paragraph (2) of Law Number 5 Of 1999, tying agreement implements the approach of per se illegal. Despite that, KPPU analyzed the tying strategy under the dealership agreement using the rule of reason approach on KPPU's Decision Number 31/KPPU-1/2019 with the consideration of the positive impacts in the dealership agreement. Secondly, the exemption of competition law regulated in Article 50 letter b of Law Number 5 Of 1999 could not be applied to the dealership agreement because it does not fulfill the criteria for license agreement related to intellectual property rights