PT Telkom free from the suspected tying agreement in Indihome case.

Friday, September 29, 2017

KPPU holds a hearing on the decision on the Case No. 10 / KPPU-I / 2016 on Suspected Violation of Article 15 Paragraph (2) (tying agreement), Article 17 (monopoly) and Article 25 Paragraph (1) Letter ‘a’ and ‘c’ (abuse of dominance) Law Number 5 Year 1999 in Telecommunications Industry Related Fixed Telephone Services, Internet Service and IP TV Services in Indonesia by PT Telekomunikasi Indonesia, Tbk, at KPPU Building Jakarta, Friday, September 29, 2017.

Present as the Commission Case Council (Council) was R. Kurnia Sya’ranie as Chairperson of the Council, as well as Tresna P. Soemardi and Munrokhim Misanam, respectively as Member of the Council, explained that the Reported in this case was PT Telekomunikasi Indonesia, Tbk.

In the readings of the Decision executed at the KPPU Building, it was revealed that the a quo case object on this decision was on the Services in Telecommunication Industry related to fixed line services, internet services, and paid TV services (IPTV).

In the hearing, it is disclosed that in relation to the relevant market, the Council considers that the product market, in this case, is a fixed line service, a product with technology that is no longer desirable by the consumer. The product that the consumer recently wants is internet products. The geographical market, in this case, is the entire territory of Indonesia.

It also relates to the Indihome closed subscription/contract agreement, that the Council believes that based on the hearings and evidence provided by each party concerned with an exclusive agreement. Where under the general provisions of Article 1 point 7, the definition of the Agreements in competition law is defined as an act of one or more business actors to bind themselves to one or more other businesses by any name, whether written or unwritten. In addition, the Investigator filed a proof of contract of subscription of the Triple Play Indihome service provided by the Reported Party through various access for Indihome subscription registration. The Commission Assembly judged the evidence the investigator had suggested was not enough to prove the existence of an effort to force the consumer to subscribe to the Triple Play Indihome.

During the hearing process, the Council has obtained information from the business actors who were the competitors of the Reported Party in the internet service market, namely PT MNC Kabel Mediacom, PT MNC Sky Vision and PT First Media which basically each of the competitors convey the internet service market is still potentially experiencing growth. In addition, the Council found that there was not enough evidence for the Reported Party to be categorized as an exploitation or abuse.

This is reinforced by the fact that the high market share owned by the Reported Party for the fixed line product, in fact, has not been proven to have the ability to use the Reported Party in force for consumers to purchase Internet service products it sells, the fact is due to fixed telephone products (fixed line) has no high bargaining value, so it does not prove to have the potential to be misused on the a quo case. Based on such fact, the Council judges that there is not enough evidence of coercion committed by the Reported Party in their product marketing. The Council judged that the buyer of the product still had the option because it was possible to purchase the product from the Reported Party separately (3P, 2P, 1P) or independently.

In the final conclusion, the Council decided and declared that the Reported Party was not legally valid and convincingly violated Article 15 paragraph (2), Article 17 and Article 25 paragraph (1) letter a and c Law Number 5 of 1999.