Price Discrimination Practices: an Economic and Legal Perspective

Riza Zulfikar

Authors

Riza Zulfikar Faculty of Law, Universitas Langlangbuana, Indonesia

Keywords:

Price Discrimination, Economy, Law

Abstract

Unfair business competition practices have the potential to result in a situation where one company completely controls the market, known as monopoly. Monopolists often employ pricing strategies that competitors cannot pursue in a healthy market. The legal rules that regulate business competition practices in various countries generally focus on the public interest to improve the welfare of society. This research aims to present a holistic understanding of price discrimination practices, highlighting the complexity of the economic and legal regulations involved and their enforcement on markets and consumers. The practice of price discrimination is one of the business practices that is usually implemented by companies to gain more profits, but because its impact can be detrimental to the welfare of society/consumers and can hamper efforts to create a healthy business competition climate, several variants of price discrimination are classified as illegal practices. Based on the Per Se Illegal doctrine, Article 6 of Law Number 5 of 1999 confirms that price discrimination, namely determining that one buyer must pay a different price from the price that must be paid by another buyer, is a prohibited business practice. The Per Se Illegal Doctrine is used because of considerations to simplify the process of enforcing price discrimination laws by providing clarity and shortening the administrative process. Implementation of Article 6 of Law Number 5 of 1999 still faces many challenges, not least because the regulation does not clearly explain what types of price discrimination can be detrimental to society and anti-competitive.

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