NON-COMPETE CLAUSES IN DEALER AGREEMENTS AND VERTICAL INTEGRATION: A DOCTRINAL ANALYSIS OF THE NORMATIVE INTERACTION BETWEEN ARTICLE 14 AND ARTICLE 19 OF INDONESIAN COMPETITION LAW IN LIGHT OF KPPU DECISION NO. 18/KPPU-L/2024 (SANY TRUCK CASE)
Published:
2026-02-28Downloads
Abstract
This research analyzes the normative ambiguity surrounding the concurrent application of Article 14 (vertical integration prohibition) and Article 19 (market control prohibition) under Indonesian Law No. 5/1999 in the context of dealer agreements with non-compete clauses. Through doctrinal legal analysis of KPPU Decision No. 18/KPPU-L/2024, which imposed Indonesia's largest competition law fine of Rp. 449 billion for simultaneous Article 14-19 violations, this study identifies substantial evidentiary overlap and legal characterization uncertainty. A comparative analysis of the competition law frameworks of Singapore, the European Union, and the United States reveals transferable principles, including market-share safe harbors, duration-based assessments of non-compete clauses, and structured foreclosure analyses. Findings demonstrate that existing Indonesian statutory provisions lack clear criteria to distinguish structural foreclosure (Article 14) from behavioral exclusion (Article 19), and that KPPU enforcement practice is inconsistent with the procedural requirements under Perkom 5/2010. The research proposes a normative clarification framework that establishes interpretive criteria for concurrent application and recommends regulatory amendments introducing market-share thresholds, a mandatory three-stage analysis, and limitations on the duration of non-compete clauses to enhance legal certainty and enforcement consistency.
Keywords:
Vertical Integration Non-Compete Clause Dealer Agreement Article 14 Article 19 KPPUReferences
Anggraini, A. M. T., Sabirin, A., Wangga, M. S. E., Abrianti, S., & Fernandez, S. O. (2024). Measuring Vertical Integration in the Technology Sector: Indonesia, the US, and the EU in Unfair Competition. Journal of Law and Legal Reform, 5(4), 1697–1736. https://doi.org/10.15294/jllr.v5i4.12437
Brook, O., & Cseres, K. J. (2024). Priority Setting as the Blind Spot of Administrative Law Enforcement: A Theoretical, Conceptual, and Empirical Study of Competition Authorities in Europe. Modern Law Review, 87(5), 1209–1257. https://doi.org/10.1111/1468-2230.12881
Commission Regulation (EU) 2022/720 on the Application of Article 101(3) of the Treaty on the Functioning of the European Union to Categories of Vertical Agreements and Concerted Practices, L 134 Official Journal of the European Union 4 (2022).
Commission Regulation (EU) No 330/2010 on the Application of Article 101(3) of the Treaty on the Functioning of the European Union to Categories of Vertical Agreements and Concerted Practices (2010). https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:102:0001:0007:En:PDF
Competition and Consumer Commission of Singapore. (2016). CCS guidelines on the section 34 prohibition. Singapore Author.
Cuyvers, A., Piqani, D., Behre, F., & Reijgwart, C. (2022). The boundaries of the Commission’s discretionary powers when handling petitions and potential infringements of EU law: From legal limits to political collaboration in enforcement? European Parliament, Policy Department for Citizens’ Rights and Constitutional Affairs. https://www.europarl.europa.eu/RegData/etudes/STUD/2022/703589/IPOL_STU(2022)703589_EN.pdf
Dewi, C., Reerink, G., & Sulistyani, I. (2023). Vertical Agreements: Indonesia. In Lexology GTDT - Vertical Agreements. Law Business Research. https://www.abnrlaw.com/files/document/2023_Vertical_Agreements_-_Indonesia1.pdf
Dunne, N. (2020). Characterizing Hard Core Cartels Under Article 101 TFEU. Antitrust Bulletin, 65(3), 376–400. https://doi.org/10.1177/0003603X20929121
European Commission. (2010). Guidelines on Vertical Restraints. Official Journal of the European Union, (C 130/01).
Expedia Inc. v Autorité de La Concurrence and Others, Case C-226/11 Court of Justice of the European Union ___ (2013).
Hanni, N. (2019). Exclusive Distribution and Non-Compete Clause in Trade: Transnational Agreements in European Union and United States. Udayana Journal of Law and Culture, 3(2), 141. https://doi.org/10.24843/ujlc.2019.v03.i02.p02
Kalintiri, A. (2015). The Allocation of the Legal Burden of Proof in Article 101 TFEU Cases: A ‘Clear’ Rule with Not-So-Clear Implications. Yearbook of European Law, yev019. https://doi.org/10.1093/yel/yev019
Komisi Pengawas Persaingan Usaha Republik Indonesia. (2024). Putusan Perkara Nomor 18/KPPU-L/2024: Dugaan Pelanggaran Pasal 14 dan 19 huruf a, b, c, d Undang-Undang Nomor 5 Tahun 1999 terkait Penjualan Truk Merek Sany di Indonesia. Komisi Pengawas Persaingan Usaha Republik Indonesia (KPPU).
Law of The Republic of Indonesia Number 5 Year 1999 Concerning Prohibition of Monopolistic Practices and Unfair Business Competition (1999).
Lubis, A. F., Toha, K., Anggraini, A. M. T., Sirait, N. N., Iman, N., Prakoso, D. A., Sitepu, S. F. R., Kagramanto, L. B., Hawin, M., Prananingtyas, P., Sukarmi, Maarif, S., & Silalahi, U. (2017). Hukum Persaingan Usaha: Buku Teks Edisi Kedua. Komisi Pengawas Persaingan Usaha (KPPU).
Ma’ruf, A., & Beny Mukti Setiyawan, W. (2020). Implementation of Business Competition Violation Norms in the Decision of the Business Competition Supervision Commission. Journal of Morality and Legal Culture, 1(2), 130–138. https://doi.org/10.20961/jmail.17i1.41087
Ngabut, R. A., & Silalahi, W. (2025). Reassessing Cartel Analysis: The Rule of Reason and Teleological Interpretation in Indonesian Competition Law. Journal of Business, Management, and Social Studies, 5(2), 70–76. https://doi.org/10.53748/jbms.v5i2.121
Ong, B. (2015). Competition Law and Policy in Singapore. Economic Research Institute for ASEAN and East Asia (ERIA).
Organisation for Economic Co-operation, & (OECD), D. (2023). Out-of-market Efficiencies in Competition Enforcement.
Pasaribu, M. S. M. (2016). Challenges of Indonesian Competition Law and Some Suggestions for Improvement. ERIA Discussion Paper Series, 2016–04. http://www.eria.org/publications/discussion_papers/
Peraturan Komisi Pengawas Persaingan Usaha Republik Indonesia Nomor 5 Tahun 2010 Tentang Pedoman Pelaksanaan Pasal 14 Tentang Integrasi Vertikal Berdasarkan Undang-Undang Nomor 5 Tahun 1999 Tentang Larangan Praktek Monopoli Dan Persaingan Usaha Tidak Sehat, 1 (2010).
Pitofsky, & Robert. (2008). How the Chicago School Overshot the Mark : the Effect of Conservative Economic Analysis on U.S. Antitrust. Oxford University Press, Inc.
Raychaudhuri, T. (2011). Vertical Restraints in Competition Law: A Comparative Analysis of European and Indian Law. NUJS Law Review, 4(4), 609–632.
Rey, P., & Tirole, J. (2007). A Primer on Foreclosure. In M. Armstrong & R. Porter (Eds.), Handbook of Industrial Organization (Vol. 3, pp. 2145–2220). Elsevier.
Sherman Antitrust Act. (1890). 15 U.S. Code § 1 - Trusts, etc., in restraint of trade illegal; penalty. https://www.law.cornell.edu/uscode/text/15/1
UK Competition, & Authority, M. (2022). The Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 (Statutory Instruments 2022 No. 516). UK Competition and Markets Authority.
U.S. Department of Justice, & Federal Trade Commission. (2020). Vertical Merger Guidelines. U.S. Department of Justice and Federal Trade Commission. https://www.ftc.gov/system/files/documents/public_statements/1580003/vertical_merger_guidelines_6-30-20.pdf
Widiyanti, R., Hidayat, N. N., Setianto, N. A., Mastuti, S., & Muatip, K. (2019). Vertical Integration of Broiler Industries in Indonesia (Analysis of Case Decisions Number 02/KPPU-I/2016). IOP Conference Series: Earth and Environmental Science, 372(1). https://doi.org/10.1088/1755-1315/372/1/012005
Widjaja, V. (2021). Analisis Terhadap Integrasi Vertikal Ditinjau Dari Pasal 14 Undang-Undang Nomor 5 Tahun 1999 Tentang Larangan Praktek Monopoli Dan Persaingan Usaha Tidak Sehat (Studi Kasus Putusan Komisi Pengawas Persaingan Usaha Nomor 13/KPPU-I/2019). Adigama Journal of Law, 3(2). https://doi.org/10.24912/adigama.v3i2.10562
Williamson, O. E. (1985). The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting. Free Press.
Yoo, C. S., Fetzer, T., Jiang, S., & Huang, Y. (2021). Due Process in Antitrust Enforcement: Normative and Comparative Perspectives. Southern California Law Review, 94(3), 843–926. https://scholarship.law.upenn.edu/faculty_scholarship/2160/
License
Copyright (c) 2026 Dian Aryani Kusady
This work is licensed under a Creative Commons Attribution 4.0 International License.
