The Doctrine of Essential Facilities in Competition Law: Balancing Monopoly Power and Fair Competition

Abstract

This study examines the application of the Doctrine of Essential Facilities in business competition law in the Indonesian port sector. Despite the implementation of a demonopolization policy, PELINDO, as a State-Owned Enterprise, still controls essential facilities, potentially leading to monopolistic practices and unfair business competition. This issue is reflected in ICC-I Decision 12/2014 and ICC-L 15/2018, where the ICC identified indications of violations of several provisions of Law No. 5/1999 on the Prohibition of Monopoly Practices and Unfair Business Competition, particularly regarding monopoly practices, market domination, and tying/bundling actions. This study analyzes the limitations and application of the Essential Facilities Doctrine in business competition law and assesses how the ICC determines violations related to the control of essential facilities in the port sector. It employs normative legal research, utilizing a legal and regulatory framework, court decisions, and case studies. The findings indicate that even though the Shipping Law has revoked PELINDO's monopoly rights, the market structure and nature of essential facilities in the port sector continue to confer a competitive advantage on PELINDO. The ICC determined that PELINDO violated the principle of fair business competition by restricting competitors' access to essential facilities. To address this issue, regulatory harmonization is needed between SOE monopoly policies and the principle of business competition, along with strengthened ICC oversight and explicit incorporation of the Essential Facilities Doctrine into Indonesia’s competition regulations. These measures would ensure fairer access for other businesses in the port sector.