KPPU vs Temasek: is cross-ownership dangerous?

Yes…, high ownership-concentration is the main characteristic of corporation in East Asia. By cross ownership often a business group can get position as a dominant player in the market through firms they own. Then the firms owned by this shareholder, which operate in the same market, can easily collude and hence exploit consumers. As a note, I add another problem as an impact of high ownership concentration that is the majority shareholder could expropriate minority shareholders.

KPPU provides evidence that pricing behaviors of Telkomsel and Indosat indicate price fixing between both companies, which are partly owned by Temasek Holding Company. However, the case still remains questions because Government of Indonesia (GoI) has also large ownership on both companies even it is higher. I think whoever has high market power will exploit consumers. So, the GoI should be punished as well!

Note: This article was written by assumption that price fixing is the main problem of Temasek case. After full report of KPPU decision launched, according to KPPU the problem is price leadership. You can find more detail my analysis in bahasa here.