CN10 - Indonesian Competition Authority cracks down on illegal bid rigging conduct
16 September 2021
The Indonesia Competition Commission ("ICC") has imposed a combined penalty of IDR 1.8 billion (approximately USD $126,349) on three construction firms for bid rigging conduct in relation to a government funded tender for the construction of a seaport in a region in the East Java province.
Key takeaways
- Article 22 of the Indonesian Competition Law prohibits business actors from conspiring with other parties to arrange or determine the winner of a tender where this may result in unfair business practices.
- Alongside delayed notifications for merger control filings, enforcement actions against bid-rigging conduct have historically accounted for a significant proportion of the ICC's enforcement activities.
- Unlike other competition law regimes across the Asia Pacific, Indonesia's Competition Law does not (yet) have a leniency programme. However, a draft bill introduced in 2017 which contemplates the introduction of a leniency framework may result in even greater enforcement action against bid-rigging and other forms of cartel conduct.
The Indonesia Competition Commission ("ICC") has imposed a combined penalty of IDR 1.8 billion (approximately USD $126,349) on three construction firms for bid rigging conduct in relation to a government funded tender for the construction of a seaport in a region in the East Java province in 2018.
Article 22 of the Indonesian Competition Law prohibits business actors from conspiring with other parties to arrange or determine the winner of a tender where this may result in unfair business practices.
The ICC imposed penalties on the three construction firms - Kurniadjaja Wirabhakti, Dian Sentosa, and Mahakarya Tunggal Abadi - after determining that these entities acted in concert enabling one firm, Kurniadjaja Wirabhakti, to win the tender. Kurniadjaja Wirabhakti was fined IDR 1.4 billion, while Dian Sentosa and Kurniadjaja Wirabhakti faced fines of IDR 200 million and IDR 150 million, respectively.
In addition, the ICC advised the government of the East Java province to consult with local ICC representatives on the manner in which public procurement tenders are convened and requested that relevant procurement staff who took part in the collusive conduct be prohibited from involvement in public tenders in the future.
Since January 2021, the ICC has initiated and fined entities in three cases for bid-rigging conduct in the context of government body funded tenders for goods and services. As noted in its 2020 Annual Report, bid-rigging conduct in government tenders has and is expected to continue to be an area of focus for the ICC.
