KPPU Calls for Amendments to the Competition Law as Part of the OECD Accession Process

On 9 November 2026, the Indonesia Competition Commission (Komisi Pengawas Persaingan Usaha or KPPU) once again called for improvements to Law No. 5 of 1999 concerning the Prohibition of Monopolistic Practices and Unfair Business Competition. As conveyed in the KPPU press release entitled “KPPU Calls for Competition Policy Reform in the OECD Accession Process”, issued on the same date, the call was made during a Coordination Meeting of the OECD National Team at Graha Sawala, Coordinating Ministry for Economic Affairs, Jakarta. The meeting was attended by KPPU Vice Chairman Hilman Pujana and discussed developments in Indonesia's accession process and the preparedness of relevant ministries and institutions.

During the meeting, KPPU Vice Chairman Hilman Pujana outlined several aspects of competition law that were of concern in the OECD evaluation. These aspects included cartel enforcement, merger and acquisition control, vertical integration, the leniency programme, and KPPU's investigative and law enforcement powers. Competition regulations involving state-owned enterprises (SOEs) and exemption provisions were also included in the discussions.

The call comes as Indonesia is undergoing the accession process to become an OECD member. The Government has also included amendments to the Competition Law as one of its priority regulatory agendas to be completed in 2027, alongside amendments to the Law on the Eradication of Corruption and the Statistics Law. This was conveyed by Coordinating Minister for Economic Affairs Airlangga Hartarto following his chairmanship of the coordination meeting on 9 November 2026.

What Is OECD Accession?

The OECD is an international organisation comprising member countries that cooperate in developing economic and social policies. The organisation establishes standards and recommendations across various fields, including trade, investment, governance, taxation, education, and competition.

The accession process refers to the stages that a country must undergo before it can become an OECD member. During this process, a candidate country is evaluated to assess the alignment of its domestic laws, policies, and practices with OECD instruments and standards. Accordingly, accession is not merely a diplomatic process but also involves domestic policy and regulatory adjustments.

According to information on the OECD Accession Portal of the Coordinating Ministry for Economic Affairs, the OECD Council decided to open accession discussions with Indonesia on 20 February 2024. The Accession Roadmap was subsequently approved on 29 March 2024 and submitted to the Government of Indonesia on 2 May 2024.

Following this, the Government prepared an Initial Memorandum, which constitutes a self-assessment of the conformity of Indonesia's regulations, policies, and practices with OECD instruments. The results of this assessment form part of the in-depth evaluation conducted by the OECD Secretariat and technical committees. Each committee will issue a formal opinion, which will serve as one of the bases for the OECD Council's final decision on Indonesia's membership.

In terms of further developments, the evaluation of the competition sector has entered the technical stage. KPPU noted that the OECD Fact-Finding Mission (FFM) took place on 21–25 September 2026. The next stage will be the Accession Review by the OECD Competition Committee, which is scheduled to take place in June 2027.

Why Does the Competition Law Need to Be Amended?

Law No. 5 of 1999 serves as the legal basis for the supervision of monopolistic practices and unfair business competition in Indonesia. The law regulates various forms of prohibited agreements and business activities, abuse of dominant position, as well as KPPU's authority to exercise supervision and enforce the law.

However, developments in economic activities and business models have given rise to issues that are not specifically addressed within the existing legal framework. One such issue is the development of the digital economy, including the use of data and digital platforms in business activities. In addition, the mechanisms for overseeing merger and acquisition transactions and the effectiveness of KPPU's powers are also among the matters addressed in the preparation of the amendments.

According to the summary of the Draft Bill on the Third Amendment to Law No. 5 of 1999 available on the DPR RI's Latest Information Package System (Sistem Paket Informasi Terkini or SIPINTER), the amendments are being prepared to update competition law in line with developments in the economy and digital business. The Draft Bill is also intended to address regulatory and law enforcement deficiencies and follow up on Constitutional Court decisions.

The Draft Bill has been included in the 2025–2029 National Legislative Programme (Program Legislasi Nasional or Prolegnas). Its preparation is being undertaken by the Working Committee of Commission VI of the House of Representatives (DPR RI), with support from the Expertise Agency of the DPR RI Secretariat General. From September 2025 to mid-2026, the preparation of the academic paper and Draft Bill involved gathering input from KPPU, academics, business associations, and legal practitioners.

Several Proposed Amendments Under Discussion

One of the matters receiving attention is the amendment of the merger and acquisition notification mechanism. Under the prevailing provisions, business actors are required to submit a notification to KPPU after a transaction has met the applicable requirements and has become legally effective. KPPU conducts an assessment to determine whether the transaction has the potential to give rise to monopolistic practices or unfair business competition.

According to the summary of the Draft Bill on the DPR website, the existing mechanism is proposed to be changed to a notification requirement at the transaction planning stage. This means that an assessment may be conducted before a merger or acquisition is effectively implemented. This amendment relates to the supervision of the impact of transactions on market structures.

In addition, the Draft Bill contains provisions to strengthen cartel regulation through a leniency programme. This programme allows business actors involved in a cartel to obtain a reduction or leniency in penalties if they assist in exposing the practice. KPPU has also highlighted the need to strengthen its investigative powers and procedures for collecting confidential information in the law enforcement process.

Other proposed amendments include broadening the definition of business actors to cover companies domiciled outside Indonesia whose business activities have an impact on the domestic market. The Draft Bill also includes a prohibition on the abuse of dominant bargaining position, the strengthening of KPPU's institutional standing and powers, and provisions concerning control over data, digital platforms, and potential collusion through algorithms.

Meanwhile, KPPU identified several follow-up measures arising from the OECD evaluation, including strengthening the leniency programme, implementing competition assessments in the formulation of government policies, adjusting the merger and acquisition notification mechanism, and strengthening procedures for collecting confidential information.

Closing

As of 9 November 2026, the amendments to the Competition Law remain under legislative deliberation. The Government aims to complete the amendments in 2027 as part of its preparations for OECD membership, while the evaluation by the OECD Competition Committee is scheduled to take place in June 2027.