IMPLICATIONS OF
LION GROUP'S NON-COMPLIANCE IN REPORTING CHANGES IN AIRFARE POLICIES TO
MONOPOLISTIC PRACTICES AND UNFAIR BUSINESS COMPETITION IN THE AVIATION INDUSTRY
Marcelino
Januar1, Muhammad Agung2, Dinda
Yusuf Tsary Arrofi3, Elisatris
Gultom4, Helza Nova Lita5
Universitas Padjajaran,
Indonesia
[email protected]1,
[email protected]2, [email protected]3, [email protected]4, [email protected]5
|
Keywords |
Abstract |
|
Airline Ticket
Tariff Policy, Monopolistic Practices, Unfair Business Competition, Aviation
Industry, Lion Group |
The
aviation industry in Indonesia plays an important role in supporting
community mobility and the national economy. However, non-compliance with
regulations, especially in reporting changes in ticket fare policies, has the
potential to create monopolistic practices and unfair business competition.
One of the cases that emerged was Lion Group's non-compliance which had an
impact on the structure of the domestic aviation market. This study aims to
analyze the implications of Lion Group's non-compliance with fare regulations
on business competition in the aviation industry. The approach used is
juridical-normative with data collection techniques through literature
studies. The data analyzed includes laws and regulations, legal decisions,
and related literature. The
results of the study show that Lion Group's non-compliance creates barriers
for competitors, reduces consumer choice, and increases the risk of unhealthy
market dominance. This violates the principles of Law Number 5 of 1999
concerning the Prohibition of Monopolistic Practices and Unhealthy Business
Competition. The
implications of this study show the urgency of strengthening regulation and
supervision by the Business Competition Supervisory Commission (KPPU) to
prevent similar violations. Transparency in tariff policies and commitment to
regulation are needed to create healthy and fair competition in the aviation
industry. |
Corresponding Author : Marcelino Januar
Email:
[email protected]
INTRODUCTION
In
the global context, the aviation industry has a strategic role as an economic
driver, a connector between continents, and a supporter of international trade.
However, the issue of unfair business competition is often in the spotlight,
especially in monopolistic and cartel practices that can harm consumers and
other business actors. Non-compliance with applicable regulations, including
reporting policy changes, often worsens this situation. According to
Specifically,
the case of Lion Group as one of the main players in the Indonesian aviation
industry is a real example of how violations of policy change reporting rules
can affect market structure. This non-compliance not only impacts business
competition but also has a negative impact on consumers. As expressed by
The
urgency of this research lies in its broad impact on the economy and consumer
confidence. In the context of national law, efforts to create legal certainty
for all business actors are challenges that must be answered.
Literature
review shows that monopolistic practices and unfair business competition have
become recurring issues in legal and economic literature.
As
an update, this study offers an in-depth analysis of the relationship between
Lion Group's non-compliance in reporting policies and its impact on
monopolistic practices in the airline industry. This study will also explore
how efficiency theory can be applied in the rule of reason approach, as
expressed by
This
study aims to identify the implications of Lion Group's non-compliance in the
legal and economic context, and provide policy recommendations to prevent
similar practices in the future. Using a multi-disciplinary approach, this
study will provide a comprehensive picture of the challenges and opportunities
in creating a fair and competitive aviation market in Indonesia.
In
compiling this research, several important references will be the basis of the
analysis.
With
a holistic approach, this research is expected to provide real contributions in
understanding and resolving business competition issues in Indonesia,
especially in the aviation industry. The urgency and relevance of this topic
are not only limited to the legal aspect, but also to its impact on consumers
and the national economy as a whole.
RESEARCH METHODS
This study uses a qualitative descriptive research type. This
approach was chosen to understand in depth the implications of Lion Group's
non-compliance in reporting changes in airline ticket policies on monopolistic
practices and unfair business competition. Descriptive research aims to
describe phenomena systematically, factually, and accurately regarding the
facts and relationships between the phenomena studied.
The approach used is a juridical-normative approach. This approach
focuses on the analysis of relevant laws and regulations, especially Law Number
5 of 1999 concerning the Prohibition of Monopolistic Practices and Unfair
Business Competition. In addition, this approach also involves a review of
legal decisions, literature, and other official documents related to the case
being studied.
The population in this study includes all regulations, legal
decisions, and documents related to monopolistic practices and business
competition in Indonesia. The sample was selected purposively, namely documents
and cases that have direct relevance to Lion Group's non-compliance, such as
Cassation Decision Number 1811 K/Pdt.Sus-KPPU/2022
and related KPPU reports.
The data in this study were collected through library research
methods. This technique includes collecting secondary data in the form of:
Primary legal sources, such as Law Number 5 of 1999 and related court
decisions. Secondary legal sources, including relevant books, journals, and
scientific articles. Tertiary legal sources, such as legal dictionaries,
encyclopedias, and the internet to support the analysis.
Data analysis was conducted qualitatively with the following
steps: Data Reduction, Sorting data relevant to the focus of the research. Data
Presentation, Organizing data in a structured narrative form. Conclusion
Drawing, Analyzing data to draw conclusions based on
the theories and regulations used. This approach is expected to provide a clear
picture of the implications of Lion Group's non-compliance with monopolistic
practices and unfair business competition in the Indonesian aviation industry
and provide appropriate recommendations.
RESULTS AND DISCUSSION
Analysis and Discussion
Position
Case
The Cassation Decision of Case Number 1811K/Pdt.Sus-KPPU/2022 involves Lion Group, one of the dominant
players in Indonesia's domestic aviation industry, which is suspected of
violating the principles of fair business competition as stipulated in Law
Number 5 of 1999 concerning the Prohibition of Monopolistic Practices and
Unfair Business Competition. The alleged violations include the abuse of Lion
Group's dominant position, especially in the implementation of airline ticket
pricing policies that are considered non-transparent and have a negative impact
on both consumers and competitors in the domestic aviation market. As a
business actor with a significant market share in the low-cost carrier sector , Lion Group is accused of exploiting this dominance
to unilaterally set prices, create barriers to market entry for competitors,
and harm consumers through unfair tariff policies. Previously, the Business
Competition Supervisory Commission (KPPU) had decided that Lion Group violated
Articles 19 and 25 of Law Number 5 of 1999 concerning abuse of dominant
position and business strategies that hinder fair business competition.
However, Lion Group was deemed not to comply with the decision and filed an
appeal, which ultimately brought the case to the cassation level.
The Supreme Court, through its cassation decision,
upheld the ICC's finding that Lion Group was proven to have abused its position
in the market to set a non-transparent tariff policy and create barriers for
competitors. This action was deemed to violate Article 19 of Law No. 5 of 1999,
which prohibits behavior that prevents other business actors from entering the
market and harms consumers, as well as Article 25, which prohibits unhealthy
business strategies. Lion Group's non-compliance with the ICC's decision was
also deemed to violate the principle of legal certainty as stipulated in
Article 49 of the same law. The Supreme Court decided to impose sanctions on
Lion Group in the form of fines and instructions to improve its ticket pricing
policy to be more transparent and not harm consumers or competitors. In
addition, the Supreme Court recommended that the KPPU increase supervision of
other dominant business actors to prevent similar violations in the future.
This decision highlights the importance of
maintaining the principle of healthy business competition, especially in
strategic sectors such as aviation that have a major impact on the economy and
public mobility. The Supreme Court also sent a strong signal that market
dominance, although not prohibited, must be used fairly to encourage innovation
and create benefits for consumers, not to create market barriers that harm
competitors or cause price distortions. Lion Group's failure to comply with the
previous decision shows that the deterrent effect in enforcing competition law
in Indonesia still needs to be improved. This case is an important precedent
for strengthening regulations related to the supervision of dominant business
actors and emphasizes the need for transparency in its business policies.
To strengthen law enforcement in the future, the
ICC needs to increase its capacity, both in terms of oversight mechanisms and
technical capabilities to handle cases involving intellectual property rights
(IPR)-based technology such as the ticket reservation system used by Lion
Group. In addition, there needs to be additional regulations that provide more
detailed guidelines on pricing and the use of technology in the context of
business competition. Cross-agency collaboration between the ICC and regulators
in other sectors, such as aviation, is also important to ensure compliance with
competition law. This decision is an important milestone in strengthening the
principles of transparency and fairness in the Indonesian market and providing
protection for consumers and business actors who compete fairly.
Market
Structure and Market in Cassation Decision Number 1811K/Pdt.Sus-KPPU/2022
Intended
Market
In the Alleged Violation Report, it is stated that
the market in question must be determined based on Article 1 number 10 of the
Antimonopoly Law which states: "A market related to a certain marketing
reach or area by a business actor for the same or similar goods and/or services
or substitutes for the goods and/or services." Referring to this
provision, the market in question must include 2 (two) things in it, namely:
a.
Product market, which is determined by assessing
the same, similar, or substitute goods and/or services;
b.
Regional markets, which are determined by assessing
the reach or marketing area of a good and/or service.
The market
is a fundamental concept in the analysis of competition law which is the basis
for determining the scope of competition between business actors. In the
Cassation Decision Number 1811K/Pdt.Sus-KPPU/2022,
the market is defined as low-cost domestic flight services in Indonesia, which
is an arena of competition between Lion Group and other business actors, such
as Garuda Indonesia, Citilink, and AirAsia Indonesia.
The product dimension of the market includes important domestic flight services
and has limited substitution, thus providing a strategic position to dominate
business actors. The geographical dimension covers the entire territory of
Indonesia, including primary and secondary routes, where Lion Group has
significant control over the number of routes, flight frequencies, and access
to more remote areas.
In an
oligopolistic market structure, Lion Group is considered to have abused its
dominant position by setting non-transparent airline ticket prices, preventing
competitors from entering the market, and creating losses for consumers. This
abuse violates Articles 19 and 25 of Law No. 5 of 1999, which prohibit behavior
that is detrimental to competitors and limits market access. Identification of
the relevant market is an important element in assessing the impact of Lion
Group's actions on healthy business competition, both for competitors and
consumers. This decision emphasizes the importance of strengthening supervision
by the KPPU and transparency of tariff policies to ensure a balance between
market dominance and healthy competition in the domestic aviation sector.
Product Market Determination
The determination of the product in the a quo case, in the context of whether the product that
is the object of the market in question is a substitute or not, has been
approached by the Commission Assembly as explained in PerICC
No. 4/2022, namely by looking at the functional aspects, characteristics and
prices of the product. Based on the testimony of Expert Prof. Dr. Ningrum
Natasya Sirait who stated that the product market is
defined as a competing product of a certain product followed by other products
that are able to replace the product, where other products can replace a
product when the existence of other products narrows the space for price
increases for the product.190 In addition, Prof. Dr. Ine Minara S. Ruky, SE, ME, gave her statement as an expert, that the
essence of the market analysis process is to analyze the ability of the
substitution concept from the demand side and the supply side.
The determination of the product market in the
Cassation Decision Number 1811K/Pdt.Sus-KPPU/2022
focuses on the identification of low-cost
domestic airline services ( low-cost carriers)
as the relevant product market. This determination was made by referring to
the characteristics of airline services as air transportation services that
have no direct substitute from other modes of transportation such as trains,
buses, or ships, due to significant differences in travel time and efficiency.
Domestic airline services have special characteristics, including a competitive
cost structure and reliance on ticketing technology protected by intellectual
property rights (IPR). In this case, Lion Group is considered to dominate the
market for these products through the operations of airlines such as Lion Air,
Wings Air, and Batik Air, which offer domestic flight services with extensive
route coverage and attractive pricing strategies for the low-cost passenger
segment. This dominance is reinforced by Lion Group's position as the player
with the largest fleet in Indonesia, as well as access to strategic routes,
both primary and secondary.
Determining the relevant product market is key to
assessing Lion Group's actions in the context of healthy business competition.
In the low-cost domestic aviation product market, Lion Group uses its position
to influence the dynamics of competition, including in setting non-transparent
ticket prices and restricting competitors' access to technology. This violates Article 19 and Article 25 of Law No. 5 of 1999 , which
prohibits abuse of dominant position and business strategies that harm
competitors and consumers. By defining low-cost domestic aviation services as a
specific product market, the Supreme Court provides a strong legal basis for
evaluating whether Lion Group's business policies have created obstacles for
competitors and harmed consumers. This conclusion shows the importance of
supervision of dominant business actors in strategic markets and the need for
transparency in tariff policies in order to create healthy competition.
Geographic
Market Determination
In the Alleged Violation Report, the Investigation
Team defines a geographic market as an area or region where a business actor is
able to raise the price of a product without attracting new business actors or
without losing significant consumers who switch to other business actors
outside the region. The determination of the geographic market in the case quo
is the region throughout Indonesia. Based on the testimony of Expert Vid Adrison, SE, MA, Ph.D., stated that if a product is only
sold in one particular place or covers that region, then the product cannot be
included in the relevant market.[1]
The determination of the geographical market in the
Cassation Decision Number 1811K/Pdt.Sus-KPPU/2022 is
a crucial element in determining the scope of the area in which Lion Group
competes and dominates the domestic flight service market in Indonesia. The
geographical market in this case is determined based on the scope of flight
services provided by Lion Group, which includes main routes such as
Jakarta-Surabaya, Jakarta-Medan, and Jakarta-Denpasar, to secondary routes
serving remote areas. This geographical dimension is relevant because Lion
Group not only dominates main routes with high demand, but also dominates
secondary routes where the presence of competing airlines is very limited. This
creates a situation where consumers in this region have limited choices, often
relying only on Lion Group services. This geographical dominance is reinforced
by the strategy of controlling infrastructure, such as IPR-based ticket
reservation technology, which provides additional control over consumer and
competitor access in certain areas.
This broad geographic coverage allows Lion Group to
leverage its position in setting non-transparent ticket prices, which directly
impacts consumers and competitors. In the context of competition law, the
determination of this geographic market refers to Articles 19 and 25 of Law No. 5 of 1999 , which prohibit the abuse of a
dominant position to create market barriers or discriminatory strategies
against competitors. The Supreme Court, in this decision, used a geographic
market analysis to evaluate whether Lion Group had used its geographic coverage
as a tool to strengthen its dominance and harm consumers in various regions in
Indonesia. The determination of a clear geographic market provides an important
basis for the Supreme Court and KPPU in ensuring that Lion Group's regional
dominance does not violate the principle of market fairness. Thus, the
geographic market becomes a key dimension that helps identify the impact of
Lion Group's business policies on the structure of domestic business
competition.
Market
Structure
The KPPU Investigation Team in the Alleged
Violation Report determined that the market structure of the
a quo case was an oligopoly market, which then after further
investigation, the Commission Panel in KPPU Decision No. 15/KPPU-I/2022 finally
determined that the market structure in the a quo case was a tight oligopoly
with high market concentration, had homogeneous products and there were several
barriers to market entry. In addition to determining the relevant market,
assessing the market structure is also important to prove whether or not there
has been a violation of the Antimonopoly Law. As previously explained, based on
economic theory, there are 4 (four) types of market structures, namely perfect
competition markets, monopoly markets, monopolies, and oligopolies. Regarding
the oligopoly market structure, it is also known that the types of oligopoly
markets can be further grouped into 3 (three) types based on the market
concentration of the four companies with the highest market share, including:
1.
Tight oligopoly, namely a market condition where 4
(four) leading companies or business groups have a market share of 60-100%.
2.
Oligopoly is a moderate oligopoly, namely a market
condition where 4 (four) leading companies or groups of companies have a market
share of 40-60%.
3.
Loose oligopoly, namely a market condition where 4
(four) leading companies or business groups have a market share of less than
40%.
a. Looking at the number of sellers which is then
associated with market share control
In the Cassation Decision Number 1811K/Pdt.Sus-KPPU/2022 , the number of sellers and market share control are
important elements in assessing the market structure and determining whether
Lion Group has abused its dominant position in the domestic aviation industry.
In this case, the domestic aviation market has oligopolistic characteristics,
with only a few major players such as Lion Group, Garuda Indonesia, Citilink, and AirAsia Indonesia dominating the market.
However, Lion Group has a much larger market share than other competitors,
especially in the low-cost carrier (LCC) segment. Through Lion Air, Wings
Air, and Batik Air, Lion Group controls a large number of primary and secondary
domestic routes, giving them significant control over the number of flights and
fares in the market. This inequality in the number of sellers and distribution
of market share creates a situation where Lion Group not only dominates the
market but also has the ability to unilaterally influence prices and market
access, which poses a risk to healthy competition.
Lion Group's
dominance of this market share allows them to implement business policies that
are detrimental to consumers and competitors, including non-transparent ticket
pricing and strategic route control that limits access for other airlines. In
the context of competition law, this significant market share control must be
evaluated based on Article 19 of Law No.
5 of 1999 ,
which prohibits abuse of a dominant position, including practices that create
market barriers. The inequality in the number of sellers and distribution of
market share also shows that the market is not competitive, with Lion Group as
the actor dictating market dynamics. The Supreme Court in its decision
emphasized that control of a large market share must be accompanied by an
obligation not to abuse this dominance, either by setting unfair rates or
limiting access for competitors. This analysis highlights the need for strict
supervision of dominant business actors to ensure fairness in strategic market
competition such as domestic flights in Indonesia.
b.
Looking at
the level of product homogeneity
In the Cassation Decision Number 1811K/Pdt.Sus-KPPU/2022 , the level of product homogeneity is an important
element in evaluating the level of competition in the Indonesian domestic
aviation market. Product homogeneity refers to the extent to which goods or
services offered by various business actors are considered similar or mutually
substituted by consumers. In the domestic aviation market, the products offered
by airlines are basically air transportation services that aim to move
passengers from one location to another. Although these products are in
principle homogeneous, the level of differentiation can arise through factors
such as ticket prices, service quality, flight schedules, and available routes.
In the case of the Lion Group, this product differentiation emerged through
their dominance on certain routes, especially secondary routes, as well as
their ability to offer tickets at more competitive prices than competitors.
However, this differentiation is not significant enough to eliminate the fact that
the main product (air transportation services) is homogeneous.
Product
homogeneity in the aviation market creates unique competitive conditions, where
consumers tend to choose based on price and availability, rather than on unique
product characteristics. In this oligopolistic market structure, Lion Group's
dominance in controlling market share and setting non-transparent ticket prices
gives them a significant advantage over competitors. The high level of product
homogeneity exacerbates the risk of abuse of dominant position, because
dominant airlines can easily take advantage of product homogeneity to determine
market prices without worrying about losing significant customers. The Supreme
Court, through this decision, emphasized that product homogeneity in the
aviation market strengthens the importance of supervision of dominant business
actors such as Lion Group, which have the potential to damage healthy business
competition by exploiting their advantages in setting fares and controlling
market access. This analysis shows that although product homogeneity is a characteristic
of this market, strict supervision is needed to prevent violations of
competition laws.
c. Looking at the barriers to entry and exit from the
market
In the Cassation Decision Number 1811K/Pdt.Sus-KPPU/2022 , barriers to entry and exit from the market are
important elements in assessing the competitive structure in the Indonesian
domestic aviation industry. Barriers to entry refer to the obstacles faced by
new business actors to enter the market, while barriers to exit relate to the
difficulties for business actors who want to enter the market. In the domestic
aviation sector, barriers to entry are very high, especially due to the large
capital requirements to purchase or lease aircraft fleets, comply with aviation
regulations, and build supporting infrastructure such as ticket reservation
systems. These obstacles are exacerbated by the dominance of business actors
such as the Lion Group which has significant control over strategic routes,
intellectual property rights (IPR)-based ticket reservation technology, and
large fleet capacity. This condition makes it difficult for new competitors to
compete, especially on routes that have been dominated by the Lion Group, both
in terms of price and accessibility.
Market entry
barriers in the airline industry are also significant, as they involve high
costs such as contractual obligations for fleet leases, severance pay for
employees, and settlement of other legal obligations. In the context of this
case, high entry barriers create a significant advantage for Lion Group to
dominate the market without significant threat from new entrants. This
dominance gives Lion Group the ability to abuse its position in setting
non-transparent ticket fare policies, which violates Article 19 of Law No. 5 of 1999. The Supreme Court in its decision
emphasized that high entry barriers exacerbate the impact of Lion Group's
market dominance, as it creates an environment where existing competitors
cannot compete on an equal footing, while new entrants are prevented from
entering. This analysis shows that significant entry and exit barriers require
stricter supervision from the Business Competition Supervisory Commission
(KPPU) to ensure that market dominance is not used to hinder fair competition
and harm consumers.
Analysis of
the Application of Relevant Market Regulations and Market Structures in
Competition Law in Indonesia
1.
Product
Market Regulation
In
understanding the product market, it should be noted that the product market
does not only include similar competing products, but also other products that
are able to replace or become a substitute option for products with the same
category or function. Other products can also be called a substitute for a
product if the existence of other products is able to narrow the space for
price increases for the product in question. In the rules governing the
determination of the product market, it is explained that the identification process
can start from the demand side and then followed by identification from the
supply side. Consumer choices must at least be represented by the main
indicators known as the price, character, and usefulness of the product in
question.
a.
Price
Indicator
There are several pricing factors that are
considered in determining the relevant market:
1)
That the price of the product must be like the
usual price in the market and the price is competitive with similar products.
If the price is too unreasonable and uncompetitive, it will complicate the
analysis process and can result in estimates about the market being too
general; competing with similar products. If the price is too unreasonable and
uncompetitive, it will make the analysis process difficult and can lead to an
understanding of the market that is too general;
2)
The products analyzed do not have to have the same
price, because there may be price differences between the products. So the focus of the analysis is not only on the nominal, but
on how consumers react to price changes that occur from the product in
question;
3)
In a hypothetical situation, if the price increase
is only on product A and does not change on substitute products, this means
that the price increase on product A should not affect the overall price
increase and should not have an impact on inflation;
4)
Price increases should be considered as changes
that occur over a long period of time or are not just temporary. Short-term
price fluctuations should be excluded from the analysis to avoid inaccuracies
in data processing and price change analysis;
5)
The hypothesized price increase should be small but
significant. With a small increase, buyers will only switch to products that
are very similar to product A. If the price increase is large, buyers may
switch to products that are very different from product A. The price increase
must be large enough to influence buyers. If the price increase is too small,
buyer behavior will not change because they need money and time to find
alternatives before switching to another product.
b.
Product
Characteristics and Usability Factors
In addition to price indicators, non-price
parameters are also recognized in PerKPPU No. 3/2009,
namely product character and utility.
1)
In the market, products do not always have to be
exactly the same as each other. Sometimes it is difficult to find the exact
same product as a substitute ( perfect substitute ).
Thus, the definition of a product in the market is only based on products that
are almost the same or similar ( close substitutes).
2)
In the market, not all products have to be the same
in terms of quality. Currently, the level of product differentiation is very
high in many ways such as technology, brand, or packaging. However, if
consumers consider that two products have the same character and function, even
though there are differences in brand or packaging, the two products can be
considered as substitutes for each other. On the other hand, if consumers feel
that two products do not have the same function and character needed, then even
though there are similarities in brand or packaging, the two products are not
considered as substitutes.
2.
Geographic
Market Settings
KPPU
Chairman Regulation No. 4/2022 has provided a definition of a geographic
market, namely an area where sellers or business actors can increase their
prices without consumers switching to other business actors or without new
business actors entering the area. This happens because the shipping costs are
cheap so that consumers do not have the desire to buy from other places or in
other words are unable to encourage the movement of consumption of the product.
So, if a product is sold in a country with insignificant shipping costs, then
the geographic market for the product is the entire territory of the country.
However, if a business actor sells a product in a certain area and consumers do
not have access to products from outside the area, then it can be concluded
that the geographic market for the product is only that area.
Determining
the geographic market is greatly influenced by the availability of the product
being analyzed. Factors such as company policies, shipping costs,
inter-regional rules, all of these determine how wide the coverage area of the
product is analyzed. Online trading and paperless transactions can make
barriers and boundaries between regions less clear. So
in other words, the advancement of online trading can expand the geographic
market area of a product. This is one of the things to consider in determining
the geographic market of a product.
The
determination of the relevant market in PerICC No.
3/2009 differs from the definition of market contained in the Antitrust Law.
This definition is more similar to the rules used in the Federal Trade Commission's Horizontal Merger Guidelines
, rather than those used in the United Nations Conference on Trade and
Development's Model Law on Competition .
- Market
Structure Regulation
The market
structure in the Business Competition Law is clearly defined in Article 1
Number 11 of the Antimonopoly Law, namely:
"Market conditions provide clues about aspects
that have a significant influence on business behavior and market performance,
including the number of sellers and buyers, barriers to entry and exit from the
market, product diversity, distribution systems and control of market
share."
From the
definition, it can be seen that the definition given is related to the market
situation that directly impacts the behavior of business actors in a market.
ICC in determining the classification of market structure in cases of business
competition refers to basic economic theory, which divides market structure
into 4 (four) forms, including:
a)
Perfect Competition Market
In a highly competitive market, the situation is
that the number of companies is very large and the ability of each company in
the market is considered very small, so that each company does not have the
ability to influence the market. In other words, the company's output is
relatively small compared to the market output. In addition to the company's
output, another characteristic of a perfectly competitive market is that the
products circulating in the market are homogeneous. This means that the products
sold are products that can provide the same satisfaction to consumers without
needing to know who the product manufacturer is. So that all companies in this
market are considered to have the ability to produce goods and services with
the same quality and characteristics.
Another characteristic of this type of market is
the freedom to enter and exit the market, seen from its unlimited mobility and
the absence of costs that must be incurred to move labor from one place to
another or even from one job to another. In addition, the information obtained
by consumers and producers is comprehensive so that there is no different
treatment of selling prices from one company to another for consumers, or
producers. However, it must also be understood that this type of market is not
found in the real world. However, there are several industries that are close
to this form of perfect competition market, such as tempeh, tofu, white
crackers, and photocopying services as well as several markets for agricultural
products.
b)
Monopoly Market
One of the distinguishing characteristics of a
monopoly market is the character that only one producer will be found in this
type of market, without direct or indirect competitors. The fact that there are
no competitors is due to the fact that there are barriers to entry for other
producers who want to enter the market. These barriers to entry can be caused
by the company's ability to produce efficiently, the company's ability to
control the source of production factors which can be natural resources and human
resources. In addition, barriers to entry can also be seen from the legal side,
for example, some companies that do have monopoly power and companies that are
legally given monopoly rights such as BUMN. Rather than being an obstacle,
another characteristic of the monopoly market form is the absence of similar
substitute goods so that the goods produced by this monopoly company are the
only type of goods. Even in terms of pricing, monopoly companies have power
because they are the only sellers in the market. Another characteristic is that
companies in this market do not need sales promotions such as advertising,
because they are the only companies in the industry.
c)
Monopoly Competition Market
A monopoly competitive market is a type of market
that approaches the characteristics of a perfect competition market. However,
what distinguishes it is that in this type of market, each company in this
market not only accepts the prevailing price in the market but has the ability
to determine the price for each product produced by the company. Companies are
able to determine their own prices because companies do not produce homogeneous
products, but rather produce goods that have customs characteristics with
products from other companies. In addition, in this type of market, the number
of companies in it is quite large so that the share of one company is smaller
than the total. The products sold are also products that have different
characteristics from other similar products or are known as differentiated
products. However, the level of differentiation in a monopoly competitive
market is still relatively low, which causes the level of substitution in the
market to be quite high. In addition, it is still the same as the perfect
competition structure, where companies can freely enter and exit the market.
d)
Oligopoly Market
In this type of market, there are only a few
sellers. This reflects that the market share of each company is quite
significant. In addition, in this market, companies in the market are interdependent,
which means that one's decision is largely determined by the behavior of other
companies in the market.
CONCLUSION
This
study shows that Lion Group's non-compliance in reporting changes in airline
ticket policies has significant implications for monopolistic practices and
unfair business competition in the aviation industry. By not transparently
reporting fares, Lion Group creates barriers for competitors and harms
consumers, thus violating the principle of fair business competition as
stipulated in Law Number 5 of 1999.
The
analysis also highlights the importance of tighter supervision by the Business
Competition Supervisory Commission (KPPU) and stricter regulations to prevent
similar violations in the future. Transparency and compliance with regulations
are key to creating a healthy and fair business climate, which will ultimately
benefit consumers and the sustainability of the aviation industry in Indonesia.
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