Jakarta – Indonesia's Parliament passed a law aimed at stamping out monopolies, cartels and other restrictive competitive practices.

The antimonopoly law, which must be ratified by President B.J. Habibie before it comes into force, will regulate mergers and acquisitions, and limit the amount of market share one company can attain.

The law marks a sea change in Indonesia, where large conglomerates traditionally held monopoly positions in many segments of business during former President Suharto's 32-year rule. The International Monetary Fund, which is leading a bailout program for Indonesia, urged the country to implement legislation on fair competition and monopolies.

The new law would prohibit one company from holding more than 50% of national market share and two or three companies from holding 75% of the market between them. Also, the law would prohibit a majority shareholder in a company from holding shares in other companies active in the same business so that the combined market share is 50% or more.

The law is potentially significant for many large companies that now control more than 50% of a market. State-owned companies are exempt from the law. It will come into force a year after its approval by Mr. Habibie, while companies will have a further six months after that to comply.

Trade and Industry Minister Rahardi Ramelan stressed that the law isn't designed to stamp out big business, but to make the market more of an even playing field. "We are not anti big business, but these big companies must be fair and not use their strong positions to impede the developments of small companies," he told a parliamentary plenary session.

Large conglomerates, many of them controlled by ethnic Chinese Indonesians, blossomed under Mr. Suharto's rule, with many holding monopoly positions in large business segments.