Starlink's Indonesia Not Practicing Predatory Pricing, KPPU Defends

TEMPO.CO, Jakarta - The low prices offered by satellite internet service provider, Starlink, are not necessarily predatory pricing practices, said a member of the Indonesian Business Competition Supervisory Commission (KPPU), Eugenia Mardanugraha.

“Because the term 'predatory pricing' is not just a low price,” Eugenia said in Jakarta on Wednesday, May 31.

Hilman Pujana, another KPPU member, added that other conditions must be met in order to be classified as predatory pricing, not just lower selling prices.

Ine Minara Ruky, an academic from the University of Indonesia, also explained that predatory pricing is a strategy to eliminate competitors by setting prices below cost in a bid to gain a monopoly position and then raising the price to recoup the losses. 

However, Ine said that it is quite difficult to carry out this practice, especially in the disruptive and innovation-based digital industry. She added that competition through innovation is legitimate in business.

“But after that, he must be able to recover the losses suffered during the predatory period by setting extremely high prices, monopoly prices for consumers,” she said.

Ine emphasized that Starlink's 40 percent discount until June 10, 2024, is not a predatory pricing practice but rather promotional pricing. She explained that predatory pricing involves setting prices below cost for an unlimited period until competitors are eliminated, which she said is impossible for Starlink.

“Starlink sets a discount price with a time limit, until June 10, if I'm not mistaken. That's not predatory pricing,” said Ine. 

In Indonesia, the prohibition of predatory pricing is stipulated in Article 14 of Law No. 5 of 1999 on healthy business competition. The practice can result in fines or the dissolution of a business.

MICHELLE GABRIELA

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