ICC HOLDS THE FIRST MSME PARTNERSHIP CASE HEARING.

Jakarta (7/10) – Indonesia Competition Commission (ICC) held a Commission Panel Hearing of the micro, small, and medium enterprise (MSME) partnership supervision  case for the first time since the issuance of ICC Regulation No. 4/2019 regarding Procedures for the Supervision and Handling of Partnership Cases. The said Panel Hearing for Continued Examination was performed for the alleged violation of Article 35 paragraph (1) of Law Number 20 of 2008 regarding the Implementation of Partnership between PT Pos Indonesia (Persero) and the Owners/Management of Postal Agents throughout Indonesia.

The case under Registration Number 16/KPPU-K/2019 in the courier and logistics service sector has its origin from the alleged control of the Postal Agents by PT Pos Indonesia (Persero) through various unilateral terminations of the implementation of the partnership, particularly the one-sided stipulation of the change in the amount of the postal agent fees without engaging Postal Agents as its partners. ICC has submitted 3 (three) Written Warnings with partnership improvement proposals to PT Pos Indonesia (Persero) in the Preliminary Examination proceedings. Eventually, ICC in its  3rd Written Warning gave several partnership improvement orders, namely:

1. Improve the regulating of the amount of Rewards by placing it in the corpus of the Cooperation Agreement between PT Pos Indonesia (Persero) and the Management of the Postal Agents with regard to the Management of Physical Outlet Courier Service Postal Agents;
2. Revoke and declare that Decision of the Board of Directors of PT Pos Indonesia (Persero) Number KD.019/DIR-5/0320 regarding Rewards and Security Deposits for Postal Agents is invalid;
3. In order that any changes to the amount of rewards must be set forth in the addendum to the Cooperation Agreement (PKS);
4. In the event that PT Pos Indonesia (Persero) wishes to make any changes to the amount of the rewards, it is obligated to discuss and disseminate the changes in the rewards amount scheme with its partners.

 In actual practice, PT Pos Indonesia (Persero) merely implemented a part of the improvement orders (Nos. 1 and 2) consequently ICC alleged that the company was exercising its control of the Postal Agents by stipulating a unilateral change in the amount of the rewards without engaging its partners. By not implementing the said 3 (three) Written Warnings, ICC has decided to take legal action against such violation through the Commission Panel Hearing.

The Investigator of ICC submitted a report on the result of the Preliminary Examination of Partnership and Warning Implementation Report in the presence of the Commission Panel and the Legal Counsel of Reported Party in the first hearing online. Such hearing proceedings will take place for 30 (thirty) days and can be extended for a maximum period of 30 (thirty) days. The next hearing will be held on October 14, 2021 with the agenda for the submission of the response by the Reported Party. If decided in violation of partnership, then PT Pos Indonesia (Persero) can be fined up to IDR10 billion or can be subject to business license revocation order.