Legal Implications of Post-Merger Notification Policy on Digital Companies in Indonesian Competition Law

Abstract

In any market structure, potential competition violations arising from merger, consolidation, and acquisition (M&A) activities cannot be completely avoided. This holds true for digital markets that involve multi-sided markets, network effects, and significant consumer data. The intricate nature of the digital market poses a challenge for competition authorities in effectively monitoring M&A transactions between digital companies. A notable example is the GoTo merger, which is set to become the largest digital company in Southeast Asia. To address this issue, this legal research aims to discuss the legal implications of the current notification policy based on Law No. 5 of 1999 by conducting contextual research on digital market operations and studying previous violations committed by foreign digital companies. This research follows a normative legal research approach, employing statutory, conceptual, and case analysis to address the problem formulation. The findings indicate that digital companies possess various possibilities to violate competition law, including monopolistic practices and unfair business competition, if the existing post-merger notification policy remains in place. As many countries are already grappling with complex issues such as data ownership thresholds, Indonesia is taking its initial steps towards implementing changes to its merger policy. By adopting a pre-merger notification policy as a reporting obligation, Indonesia will enable the Commission for the Supervision of Business Competition (KPPU) to assess M&A transactions more effectively and provide legal certainty for businesses regarding the lawfulness of their M&A activities.