Optimal deterrence: Exploring business cartels in Indonesia and their impact on the economy

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A business cartel is a business that is carried out by business actors to obtain market power by regulating the market by fixing prices, for example, by limiting the availability of commodities on the market. This paper examines in detail business cartel practices in Indonesia, explores their impact on the economy, and analyzes KPPU as an unfair business eradication body. In so doing, this paper analyzes eight business cases in Indonesia to describe and evaluate the practices of economic cartels in the industry. Those cases were randomly chosen for different periods and different industrial sectors. Using a qualitative analysis method, it is found that business cartels, unfortunately, are still rather common practice in Indonesia. It is also found that business cartels harm economic development, citizens and customers, since they tend to be monopolistic practices so that the customers will have to pay high prices for limited commodities. In addition, KPPU needs to be reformed, and the amendment of current antitrust law also needs to be executed. Consequently, judges and lawmakers should understand the balance of business interest and public interest at the same time.

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    • Table 1. Business cartel impact
    • Table 2. Cartel information in Indonesia
    • Conceptualization
      Dyah Permata Budi Asri, Raden Murjiyanto, Rooseno Hertanto
    • Formal Analysis
      Dyah Permata Budi Asri
    • Validation
      Dyah Permata Budi Asri
    • Visualization
      Dyah Permata Budi Asri, Raden Murjiyanto
    • Writing – original draft
      Dyah Permata Budi Asri
    • Project administration
      Raden Murjiyanto, Rooseno Hertanto
    • Data curation
      Rooseno Hertanto
    • Investigation
      Rooseno Hertanto
    • Writing – review & editing
      Rooseno Hertanto
    • Supervision
      Edy Sriyono
    • Methodology
      Edy Sriyono