ON PROPOSAL TO REGULATE ABUSE OF SUPERIOR BARGAINING POSITION: LESSONS FROM OTHER JURISDICTIONS

Abstract

The latest version of the draft bill regarding Law on the Prohibition of Monopolistic Practices and Unfair Business Competition has added new arrangements about the abuse of a superior bargaining position. The new law proposal which is intended to amend existing Indonesian competition law (Law Number 5 Year 1999) stipulates that any business actor is prohibited from abuse its superior bargaining position within a partnership agreement with other less dominant entities. Under Law Number 20 Year 2008 on Micro, Small and Medium Enterprises, a partnership agreement means any agreement made between micro, small and medium enterprises and large enterprises like state or privately owned national businesses, joint ventures and foreign businesses that conduct economic activities in Indonesia. For example under the Indonesian Minister of State-Owned Enterprises (SoE) Regulation No. 7 of 2015, the SoE is obligated to arrange a business partnership agreement with small scale enterprise. Unlike the arrangements on abuse of dominant position which requires the establishment of monopoly power or dominance in a relevant market, the abuse of superior bargaining position may exist without market power and only required competition authority to detect whether there is any exploitation by the counterparty in a relatively stronger bargaining position. Such a condition makes many antitrust experts or economists question the relevancy of regulating abuse of superior bargaining position under competition law. However, several jurisdictions –Japan, Korea, Taiwan, France, and Germany- have regulated the abuse of superior bargaining position under their national competition laws