The application of effects doctrine in foreign mergers based on the Indonesian anti monopoly law

Effects doctrine means domestic competition laws are applicable to foreign firms, but also to domestic firms located outside the state’s territory, when their behavior or transactions produce an effect within the domestic territory. This doctrine applies in some countries, and may even be applied in merger control, because the use of this doctrine is aimed at preventing monopolistic practices and unfair business competition by foreign companies through merger. Competition law in Indonesia currently regulates merger control by using single economic doctrine, so it has not been able to optimally prevent foreign merger which has negative impact in the domestic market. Business Competition Supervisory Authority has the right to control business merger by way of defining merger criteria, notification system, notification conditions, substantive test, time frame, notification result, technical aspects related to the parties required to submit notification, foreign merger and legal challenges. The enactment of the ASEAN Economic Community (AEC) provides an opportunity to harmonize the control of mergers in the regional area of ASEAN. Therefore, consideration should be given to the steps that must be taken to enforce the effects doctrine in the merger control system, design the technical application, and overcome the obstacles to be faced in its application. In order to generate a complete idea, it is necessary to compare the law on merger control in ASEAN member countries, so as to produce a comprehensive conclusion.