Proven to Do Monopolistic Practices, 3 Lion Air Group Companies Fined IDR 1 Billion

JAKARTA, KOMPAS.com – The Business Competition Supervisory Commission (KPPU) has stipulated a sanction of Rp. 1 billion for the three companies that are members of the organization Lion Air Group. The three companies include PT Lion Mentari (Reported Party I), PT Batik Air Indonesia (Reported Party II) and PT Lion Express (Reported Party IV).

The three companies were proven to have violated Article 19 letter d of Law Number 5 Year 1999 concerning Prohibition of Monopolistic Practices and Unfair Business Competition.

“In this decision, KPPU has imposed a fine of Rp. 1 billion on each Reported Party, so that in total, KPPU has imposed a fine of Rp. 3 billion on Lion Air Group,” said the Head of KPPU Public Relations and Cooperation Bureau Deswin Nur, via written statement, Monday (29/3/2021).

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The decision to sanction a Rp. 1 billion fine was postponed due to the consideration of the company’s condition due to the impact of the Covid-19 pandemic. Nevertheless, KPPU warned the three Lion Air Group companies not to repeat a similar incident within a year.

The sanction decision was read out directly by the Chairperson of the Commission Council for Natural Cases Wibowo, accompanied by Members of the Commission Council Ukay Karyadi and Harry Agustanto in court decision case number 07 / KPPU-I / 2020.

Meanwhile, another Reported Party, namely PT Wings Abadi (Reported Party III) was declared not in violation, because it did not have a flight schedule for the route which was the object of this case.

“Furthermore, taking into account various considerations, including the cooperative nature, the negative impact, the impact of the Covid-19 pandemic on the Reported Parties, and the fact that the agreement has been terminated, the Commission Council has also determined that the fine does not need to be implemented by the Reported Parties. if within one year since the decision is legally binding, the three Reported Parties have violated Article 19 letter d of Law Number 5 Year 1999, “he explained.

Deswin explained, this case stems from the accumulation of cargo (goods, post and cargo) that occurred at Batam’s Hang Nadim Airport in the July-September 2018 period.

In the investigation, evidence was obtained of a cooperation agreement entered into by PT Lion Mentari, PT Batik Air Indonesia, and PT Wings Abadi with PT Lion Express.

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In this cooperation, KPPU found an exclusive right or exclusivity to PT Lion Express for the use of a cargo capacity of 40 tons per day for the 4 agreed flight routes.

This action has been proven to have closed or made it difficult to access goods delivery for official cargo agents who are not registered as agents of PT Lion Express.

Thus, other cargo agents are forced to use alternative cargo services outside of Lion Express. However, this discriminatory behavior is known to be ineffective. This is because Lion Express has not succeeded in picking up customers from other cargo agents and has instead switched to other airlines.

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