The KPPU found the companies engaged in discriminatory vertical integration and excluded competitors from market access.
The Indonesian Competition Commission (KPPU) today imposed a record fine of 449 billion rupiah ($27.4 million) on three local subsidiaries of Chinese heavy equipment manufacturer Sany Group, finding they engaged in anticompetitive conduct that pushed two distributors out of business.
The case stems from Sany International’s 2023 decision to require two long-time local non-exclusive dealers — PT Pusaka Bumi Transportasi and PT Gajah Utama International — to purchase trucks, heavy equipment and spare parts exclusively through the company’s three Indonesian subsidiaries. These subsidiaries also sold equipment directly to end-users, bypassing local distributors — a practice the KPPU found violated Indonesian regulations requiring large businesses to use local distribution channels.
In addition, the Sany units treated the two local dealers as end customers, imposing stricter payment terms on them, which contradicted their three-year purchase planning commitments.As a result, both dealers were unable to meet their targets and eventually lost access to Sany products and spare parts. The commission found Sany’s actions to be unfair, discriminatory, and in violation of the law.
The KPPU said the companies engaged in discriminatory vertical integration that violated Article 14 of Indonesia’s Competition Law. They were also found to have breached Article 19 provisions prohibiting market foreclosure, obstruction of competitors and conduct that causes economic harm.
The case involves Sany International Development and three Indonesian units: PT Sany Indonesia Machinery, PT Sany Heavy Industry Indonesia and PT Sany Indonesia Heavy Equipment. The commission found that all four were “legally and convincingly proven” to have engaged in anti-competitive behavior, according to Moh. Noor Rofieq, head of the KPPU panel of commissioners that heard the case.
Fines were imposed on the three Indonesian units:
- PT Sany Indonesia Machinery received a 360 billion rupiah fine — the highest single-company penalty ever imposed by the KPPU;
- PT Sany Heavy Industry Indonesia was fined 57 billion;
- PT Sany Indonesia Heavy Equipment was fined 32 billion rupiah.
The parent company, Sany International Development, was not fined but was ordered to revise its distributorship scheme.
“This is the highest fine the KPPU has ever imposed, even higher than the fine against Google,” commission spokesperson Deswin Nur said. "This should serve as a lesson to all businesses, whether foreign or domestic investors, that the KPPU is serious about imposing sanctions on companies that engage in monopolistic and unfair business practices."
The KPPU fined Google 202 billion rupiah ($12.4 million) in January in a separate monopoly case over its payment system.
Source: MLex
