Cartels are different from other forms of unfair business competition. Extensive investigations must be conducted in order to determine whether cartel practices have occured. “Parties in a cartel are hidden” says Ane Minara Ruki, a lecturer at Universitas Indonesia during a seminar at Pelita Harapan University, Tangerang, Friday (20/1).

To prove the existence of a cartel, certain criteria must be met. The requirements are stipulated in Articles 5 and 11 of Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition.

Two types of evidence can be used to prove the existence of a cartel: direct and circumstantial evidence. Direct evidence provides direct proof of a cartel and does not require an intervening inference. Direct evidence includes agreements, electronic mail, video tapes, and recordings of conferences.

Circumstantial evidence indicates the existence of a cartel, but requires additional analysis in order to prove the existence of a cartel. Circumstantial evidence includes evidence of communication between businesses and economic evidence.

Anna Maria Tri Anggraini, commissioner of Business Competition Supervisory Commission (KPPU), and also a panelist at the seminar,  explained that “plus factors” are helpful to support circumstantial evidence. Factors such as, the price fixing ratio, market structure analysis, and facilitating devices are intended to support the validity of circumstantial evidence. Statistics are used to analyze these factors.

KPPU has been using circumstantial evidence to eradicate cartels. For example, in the 2009 fuel surcharge case, the KPPU used circumstantial evidence of parallel pricing to determine the existence of a cartel.

Parallel pricing can indicate the existence of a cartel. However, parallel pricing can also occurin perfect market conditions. “Parallel pricing in a perfect market shows perfect social welfare,” says Sutrisno Iwantono, Chairman of the Indonesian Chamber of Commerce and Industry at the  seminar.

In the 2009 fuel surcharge case,KPPU had information about an agreement between the Indonesian Air Carriers Association (INACA) and 13 airlines to fix fuel surcharge prices. However, collecting data about a cartel can be difficult.

Anne Maria Tri Anggraini, explained that only six of the 13 airlines send financial data to KPPU. Out of these six, only three airlines send complete data. Collecting direct evidence of a cartel is difficult, making it even harder to eradicate cartels Companies tend to keep financial data to themselves. “Some [companies]even have two to three sets of data for different purposes,” she added.

To make it easier to uncover evidence of a cartel, one participant recommended increasing the KPPU's authority. Rikrik Rizkiana, a lawyer and also a panelist at the seminar, pointed out that some countries categorize cartels as extraordinary crimes, just like corruption crimes, and efforts to eradicate cartels must be as serious as efforts to eradicate corruption.

“KPPU should have the same investigatory authority as the KPK (Corruption Eradication Comission),” he said.

(Mahinda Arkyasa)