Vertical Integration in Competition Law and the Reality of Manufacturing Industry in Indonesia

  • Yayan Hernayanto,
  • Kurnia Toha and Yetty Komalasari Dewi
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  • Yayan Hernayanto

    Student at Law Faculty University of Indonesia, Jakarta, Indonesia

  • Kurnia Toha

    Professor at Law Faculty University of Indonesia, Jakarta, Indonesia

  • Yetty Komalasari Dewi

    Associate Professor at Law Faculty University of Indonesia, Jakarta, Indonesia

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The manufacturing industry is one of the pillars of the national economy. This sector is a part that is fostered and regulated by the Ministry of Industry. The government as a policy maker makes a roadmap for national industrial development. On the other hand, business actors struggle for the continuity of the company's business that can operate in a long run. The sustainability of the production process in the manufacturing industry is highly dependent on the company's business model and production system. Scarcity of supply and efficiency are the 2 (two) main things that support it. Vertical integration is one of the business strategy models that can be implemented by Business Actor. Whatever the strategy is chosen, at the end it aims to get maximum profit for the company. Competition law in Indonesia regulates vertical integration, both upstream and downstream level, and this will be closely related to the choice of business model strategy for business actors. Competitive goods are the target of manufacturing companies to get a good market share as a sign of acceptance of these products in the market. Pro and anti-competitive impacts become the straight line that limits vertical integration for the manufacturing industry. This paper will describe the entire package related to business actors in the manufacturing industry and their suppliers, especially at the upstream stage. Because between backward vertical integration and industrial reality cannot be separated. This research was also conducted on the implementation of vertical integration in the manufacturing industry, the motivation, and the methods used and to see whether the vertical integration is included in the category of vertical integration that is prohibited or allowed under the provisions of the Business Competition Law.




International Journal of Law Management and Humanities, Volume 6, Issue 3, Page 128 - 145


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