The Unicorn Is a Myth No More: A Ratio Decidendi Analysis on First Official Predatory Pricing Case in Indonesia

Abstract

Predatory pricing has long been termed like a dragon or a unicorn because the practice is often considered irrational and therefore impossible to find or at least unlikely to work. However, the case that befell PT Conch South Kalimantan Cement broke the stigma in Indonesia, which was legally proven to practice predatory pricing through the Business Competition Commission Council (KPPU) Case Decision Number: 03/KPPU-L/2020. Considering that predatory pricing is complicated to prove because it requires certain elements to be fulfilled, this research then aims to analyze the predatory pricing elements, which became strong reasons that underlay the KPPU Council's determination of PT Conch South Kalimantan Cement as a predatory business actor so that it is entitled to be punished with billions of rupiah. By applying the normative method with a statutory, conceptual, and case approach through primary and secondary legal materials, which were analyzed by qualitative and prescriptive analysis, this study ultimately found the results that the elements in the form of business actors, supply, goods, selling at a loss or fixing a very low price, eliminating or shutting down the business of its competitors, the relevant market, and causing monopolistic practices and/or unfair business competition have become the ratio decidendi of the KPPU Council in determining the practice of predatory pricing. These reasons can then be used as decisions on similar issues in the future.

Effectiveness of Handling Cartel Cases by the Business Competition Supervisory Commission (KPPU)

“…Business actors who engage in cartels violate Law Number 5 of 1999 Concerning the Prohibition of Monopolistic Practices and Unfair Business Competition [22]. Violation of the cartel prohibition is an issue that has received sufficient attention from the public because cartels can cause harm to the consumer community, which generally involves commodity products, such as cooking oil, beef, garlic, and others [23].…”

Predatory Pricing for E-Commerce Businesses from a Business Competition Law Perspective

“…In Guideline Article 20 Concerning Selling at a Loss (Predatory Pricing) it is stated that in general business actors who apply predatory pricing is an incumbent business actor who does not want competitors in the business he carries out (Zaid et al, 2022) . The method used by incumbent business actors is to set prices for goods and/or services below the costs they incur so that competitors cannot survive in the same market share.…”

“…In relation to the proscription of monopolistic activities and unfair competition, one of the proscribed behaviors encompasses the implementation of a pricing tactic that is prejudicial to rival firms, sometimes referred to as predatory pricing (Asmah, 2022). According to Zaid (2022), Article 20 of Law no. 5 of 1999 stipulates that business entities are prohibited from engaging in practices such as selling goods or services below cost or setting excessively low prices with the intention of eliminating or driving out competitors in the same market.…”

Peran Undang-Undang Persaingan Usaha dalam Meningkatkan Pertumbuhan Ekonomi

“…11 Hal-hal tersebutlah yang kemudian menjadikan hukum ini telah dianggap cukup kontroversial. 12 Meskipun demikian, Sayangnya sejauh ini penelitian terbaharu yang berkaitan dengan persaingan usaha dan anti monopoli hanya sebatas pada, atau juga pada hubungan hukum (seperti hubungan antara hukum persaingan usaha dengan hukum perlindungan privasi data pribadi 13 , regulasi ekonomi 14 , dan kebijakan kekayaan intelektual 15 ) dan perbandingan hukum semata (seperti perbandingan antara hukum persaingan usaha di Eropa dengan Amerika 16 , Jepang dan Cina 17 ). Bahkan mayoritasnya berusaha meneliti kasus-kasus yang terjadi (seperti kasus terkait penyalahgunaan posisi dominan 18 termasuk juga di Indonesia seperti kasus Persekongkolan tender (collusive tendering) 19 dan predatory pricing.…”