Hotman grabs Indonesia competition case

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The district court has overturned the competition watchdog’s claims of Grab Indonesia offering preferential treatment to drivers in its rental programme. Indonesia’s business competition supervisory commission (KPPU) built the case after it received complaints from independent Grab drivers that claimed having an unfair distribution of orders.

Following the complaints, the KPPU alleged Grab Indonesia was using preferential treatment for drivers who rent cars via the Grab-affiliated company, Teknologi Pengangkutan Indonesia (TPI).

Hotman Paris Hutapea
Hotman Paris Hutapea

The watchdog later decided, on 2 July 2020, to impose a US$3.2million fine on Grab Indonesia and TPI for violations of articles 14 and 19 in Law (UU) No. 5/1999 concerning the “prohibition of monopolistic practices and unfair business competition” relating to its partnership with TPI.

Hotman Paris Hutapea, at Hotman Paris & Partners, represented Grab Indonesia and TPI to appeal to the South Jakarta District Court, which resulted in the case being cancelled. The verdict also means there was no violation and discrimination as stated in the law.

“Grab was convicted by the KPPU because it was considered to control the market, and there was discrimination in giving priority orders, suspend periods and other facilities,” said Hotman to Asia Business Law Journal. “According to the South Jakarta District Court, Grab does not control the market, does not discriminate, and all fines were cancelled.”

Hotman said that TPI only operated in four cities in Indonesia, with less than 10% market share. Based on the country’s anti-monopoly law, two or three business actors, or a group of business actors, are prohibited from controlling 75% or more of the market share of certain types of goods or services.

TPI is a car rental service company that collaborates with Grab Indonesia for a car rental programme, with the option for Grab drivers to gain ownership of the car after several years. The KPPU alleged that the co-operation scheme’s preferential treatment included algorithm functions to allocate TPI partners with more rides than other drivers. This practice has occurred in monopolistic practices and unfair business competition against non-TPI partners and individual partners.

Responding to this ruling, the KPPU will file an appeal against the district court’s verdict.