COURT OVERTURNS KPPU'S RULING ON CARREFOUR

Jakarta, Feb 17 (ANTARA) - The South Jakarta District Court has overturned a Business Competition Supervisory Commission (KPPU) decision declaring PT Carrefour Indonesia guilty of a monopolistic act and unhealthy competition by acquiring PT Alfa Retailindo (minimarket chain) in 2008.

"Our ruling has been revoked by the South Jakarta District Court. We will study the verdict's substance and thereafter formulate our stance," A Junaidi, KPPU's communication director, said here Wednesday.

He said the KPPU respected the outcome of the court proceedings but was still convinced that in substantial terms, its ruling on PT Carrefour Indonesia was legally correct.

Junaidi said the court proved to differ with KPPU on the definition of the market involved. "According to KPPU, the market involved was the supply of goods and services at super and hyper markets, not those at minimarkets. The court's jury, however, had a different view and maintained that minimarkets were part of the market involved," he said.

Consequently, the court concluded that Carrefour was controlling less than 50 percent of the market and could thus not be considered as having monopolized the retail trade.

The KPPU had in its ruling on November 3, 2009, declared Carrefour guilty of violating two articles in the Anti-Monopoly Law. It therefore ordered Carrefour to transfer its 75-percent stake in PT Alfa Retailindo to another party not affiliated to Carrefour at the latest one year after the KPPU's ruling had legally come into permanent force.

Carrefour was also required to pay a fine of Rp25 billion to the state, Junaidi said.

Evidence produced during the KPPU hearings in the Carrefour case had shown that Carrefour's upstream retail market share had increased to 57.99 percent in 2008 following its acquisition of Alfa whereas in 2007 its market share was only 46.30 percent.

In KPPU's understanding, the "upstream" market was the supply of goods at hyper and super markets and of retail services at hyper and super markets all over Indonesia.