Indonesia’s New Merger Case: Legal Warning Signs for Foreign Investors

1. The Background

Recently, Indonesia saw the merger of a digital platform with a large e-commerce operator. The move aimed to create synergy and boost competitiveness in a saturated online market. However, the deal was soon met with scrutiny from KPPU — the Indonesian competition commission — for possible violations of antitrust principles.

2. What Does the Law Say? – UU No. 5/1999

The Indonesian Anti-Monopoly Law (Law No. 5 of 1999) outlines strict limits on market domination and anti-competitive practices. Key provisions relevant to mergers and acquisitions include:

ArticleSummaryArticle 17Prohibits market dominance above 50% without proper oversight.Article 25Forbids abuse of dominant position (e.g., price control or unfair promotion).Articles 27–28Require mergers to be reported to KPPU if they impact competition.Article 35Grants KPPU the power to impose administrative penalties, force divestitures, or cancel mergers.

These clauses are particularly triggered when one party plays dual roles — both as a platform and a commercial seller — potentially disrupting fairness in the ecosystem.

3. Long-Term Legal Risks for Similar Mergers

• Regulatory rejection or forced structural separation

• Significant financial penalties

• Reputational damage and loss of ecosystem trust

• Delays in expansion or licensing

  
  

4. Strategic Lessons for Foreign Investors

✅ Always notify KPPU for mergers that impact market share
✅ Avoid internal conflicts of interest between platform operators and sellers
✅ Seek legal counsel when structuring cross-border partnerships or acquisitions

This case is a strong signal: Indonesia takes anti-monopoly regulation seriously. For investors aiming to scale in Southeast Asia’s largest economy, compliance with UU No. 5/1999 is not just legal housekeeping — it’s a strategic advantage.

👉 Need legal advisory or market-entry strategy in Indonesia?
Satra Sinar Abadi Group is here to help your business grow, legally and sustainably.

📩 Contact Us for a private consultation.

Satra Sinar Abadi Group

Empowering business growth in Indonesia – legally, strategically, and sustainably.

A major consolidation between a global platform and a local e-commerce company in Indonesia has raised red flags from the country’s antitrust authority. While the details remain under legal review, the case serves as a timely reminder for foreign investors to deeply understand Indonesia’s monopoly law — UU No. 5 Tahun 1999 — before entering or expanding in the market.