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A look at monopoly rights in the new SOEs Law
The granting of rights to a monopoly seems to be increasingly generalized or facilitated.
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High-risk occupation: A technician from state electricity company PT PLN stands atop a transmission tower during regular maintenance work on Dec. 27, 2023, in Palu, Central Sulawesi.
(Antara/Basri Marzuki)
T
he government on Feb. 24 issued Law No. 1/2025 as the third amendment to Law No. 19/2023 on State-Owned Enterprises (SOEs) which is mostly aimed at facilitating the establishment of a sovereign wealth fund. However, there are other provisions that are interesting to look at from a competition policy perspective, namely the regulation of the right to a monopoly.
Let's compare this aspect to the construction of Law No. 5/1999 on competition.
One of the new articles in Law No. 1/2025 quite interesting to read from a competition policy perspective is Article 86M on the right to a monopoly. This article states that “the President may grant monopoly rights to SOEs or subsidiaries of SOEs to produce and/or market goods and/or services related to the livelihood of the people and branches of production that are important to the state, in the context of state interests and/or other matters based on the President's consideration”.
This article is closely related to Article 51 in the 1999 competition law. The article states that "a monopoly and/or concentration of activities related to the production and/or marketing of goods and/or services that control the lives of many people, as well as branches of production that are important to the state, shall be regulated by law and organized by state-owned enterprises and/or bodies or institutions established or appointed by the government".
At first glance, the two articles are similar. Perhaps the competition law is one of the references in their drafting. However, if we compare the construction of the two articles, there are several significant differences.
First, monopolies can only be granted to SOEs or subsidiaries of SOEs, not SOEs or bodies or institutions formed or appointed by the government as in Law No. 5/1999. Thus, only two types of companies, SOEs or subsidiaries of SOEs, can become monopolies.
