Antitrust Amendment, Lawyers and Notaries Beware!

 
Happy Rayna Stephany, Yanuar Pribadhie
 
Lawyers and notaries may be feeling concerned about the plan to amendment  Law No. 5 of 1999 on Prohibition of Monopolistic Practices and Unfair Business Competition (“Antitrust Law”) and possible consequences for their professions.
 
Under the proposals being considered, there is a possibility that both legal and notarial professions may be subject to the prohibition of market domination based on the current amendment draft (“Draft”). Muhajir, a lawmaker and member of the Amendment Initiator Team of the Antitrust Law, confirmed this is the likely outcome under the new definition for business (pelaku usaha) under the Draft that covers these professions.
 
Pursuant to Article 1 (4) of the Draft, “business” is defined as “person or business entity, having legal personality or otherwise, that establishes and is domiciled or doing business within or outside the Indonesian jurisdiction that affects Indonesian economic matters, either solely or in cooperation through contracts in carrying out any business activity”.
 
“Lawyers, for example, may fall under this definition as they fulfill the elements of person or legal entity and doing economic activities,” Mr. Muhajir says.
 
Mr. Muhajir adds that many Indonesian law firms are now affiliated with foreign counterparts and could be viewed as having an intention to dominate the market. If a dominant position reaches more than 75% market share, lawyers will possibly be subject to the prohibition on market domination.
 
“The action that is prohibited is the intention to create such domination through a contract. So it depends on the existence of such a situation. But regardless of that situation, as per the definition, lawyers are subject the Draft,” emphasizes Mr. Muhajir.
 
In the past few years, affiliations between Indonesian law firms and their foreign counterparts have increased. Some local firms are affiliated with Singaporean law firms, some others even with Egyptian as well as law firms form other countries. This has largely been in response to the upcoming ASEAN Economic Community.
 
Meanwhile, for notaries, Mr. Muhajir explained that the possibility of this profession being subject to the  Draft derives from Law No. 2 of 2014 on Notaries, which allows notaries to create civil partnerships.
 
“This means, notaries may create partnerships and dominate the market. If the partnership became dominant, that is the time when they are subject to the prohibition,” stated Mr. Muhajir.
 
Mr. Muhajir is, however, considering adding additional elements to the definition to exclude lawyers and notaries from the scope of the Antitrust Law.
 
“Maybe by adding ‘for the purpose of profit’ or the like to the definition would do. However,  an affiliation with a foreign law firm is, after all, for the sake of gaining profit,” Mr. Muhajir says.
 
In response to this issue, Nawir Messi, Chairman of the Commission for the Supervision of Business Competition (KPPU), is yet to confirm whether notaries and advocates may be subject to the Antitrust Law. The key point to determine whether an occupation is subject to the Antitrust Law is the nature of the salary or fee gained by the professional.
 
“If the honorarium received is derived from market mechanisms, the profession may be subject to the law. However, if it is derived from laws and regulations, they may not be,” concluded Mr. Nawir.
 
(hot/kc)