Thursday, April 5, 2018 at the E3 Hall of the Faculty of Economics, State University of Malang, the Faculty of Economics had guests from KPPU (Business Competition Supervisory Commission). Present at the event were representatives from KPPU, Dean of the Faculty of Economics Dr. Cipto Wardoyo, S.E., M.Pd, M.Si.Ak, CA, H. Subagyo, S.E., S.H., M.M. (Lecturer in the Department of Management) along with several lecturers from the Department of Management, Lecturer in the Department of Accounting and Lecturer in the Department of Development Economics Faculty of Economics.
During the event, KPPU conveyed the prohibition of cartels in Indonesia. A cartel occurs when a group of companies in a particular industry are supposed to compete with each other, but they agree to coordinate their activities so that they can raise prices and earn profits above competitive prices. The main forms of cartels occur due to production arrangements, territorial division, price fixing and tender arrangements.
The impact of cartels is generally agreed by scholars to be detrimental both to the economy of a country and to consumers.
1. Potential loss to a country's economy
- Allocation and production inefficiencies
- stifle innovation and the discovery of new technologies
- discourages the entry of new investors
- causing the country's economy to be inconsistent and less competitive.
2. Potential harm to consumers
- consumers pay a higher price for a good or service
- The goods or services produced may be limited in terms of quantity and/or quality;
- limited choice of business actors
The Cartel Prohibition is regulated in Article 11 of Law No. 5 Year 1999 stipulating that "Business actors are prohibited from entering into agreements, with their business competitors, which intend to influence prices by regulating the production and marketing of goods and services, which may result in monopolistic practices and or unfair business competition". Provisions relevant to the prohibition of cartels can also be found in 7 other articles, namely: Article 5 on price fixing, Article 7 on below-market price fixing, Article 9 on territorial division, Article 10 on boycott, Article 12 on trust, Article 22 on bid rigging, Article 24 on conspiracy to hinder production and/or marketing.
Cartel Sanctions, based on the provisions of Article 47 of Law No. 5 Year 1999, KPPU may impose sanctions in the form of administrative actions in the form of; stipulation of cancellation of agreements, orders to business actors to stop activities that are proven to cause monopolistic practices and unfair business competition and/or harm the public, stipulation of compensation payments, imposition of fines as low as 1 billion rupiah and as high as 25 billion rupiah.