The antitrust authority insists that its decision to impose fines totaling 755 billion Indonesian rupiah is lawful.
Indonesia’s competition agency urged judges on Thursday to reject appeals filed by 87 online lenders against the regulator's record interest-rate cartel ruling, arguing that neither government involvement nor the use of price ceilings exempted the lenders from competition law.
During a hearing at the Central Jakarta Commercial Court, lawyers for the Indonesian Competition Commission, or KPPU, submitted a 716-page filing defending the regulator’s March ruling that found 97 lenders guilty of coordinating interest rates through the Indonesian Joint Funding Fintech Association, or AFPI.
The KPPU maintained that the lenders had violated Article 5 of Indonesia’s 1999 competition law by aligning pricing behavior through AFPI’s interest-rate caps.
State Action Doctrine challenged
A central argument raised by the lenders is that the case falls outside competition law because the interest-rate policy was implemented under the direction of the Financial Services Authority, or OJK.
The lenders argued that the arrangement constituted government competition policy and should therefore be exempt under the “State Action Doctrine.”
KPPU lawyer Endah Widwianingsih rejected the argument as "groundless," saying the doctrine applies only where the government clearly formulates the policy and actively supervises its implementation. In this case, she argued that no such conditions existed because the OJK never formally regulated online lending rates.
Instead, Endah told the court that the OJK left the rates to be determined by the AFPI. She added that companies cannot automatically escape antitrust scrutiny by citing informal government involvement.
The KPPU also challenged the lenders’ claim that the OJK directed the policy, arguing that the alleged instructions were merely verbal and unsupported by written documentation or official records.
Endah said that strategic policy should not rely solely on verbal instructions or informal recommendations.
The lenders had also raised procedural objections, including claims that the KPPU failed to uphold principles of equality and transparency during proceedings.
The regulator also rejected those allegations, saying the investigation and evidentiary process complied with due-process requirements.
Price ceilings still restrictive, KPPU says
The lenders also argued that the AFPI’s interest-rate caps of 0.8 percent and 0.4 percent did not amount to price fixing because they functioned as ceilings rather than fixed prices, allowing lenders to continue competing below the maximum thresholds.
They said pricing remained dynamic across platforms, with rates varying depending on credit scoring and negotiations between lenders and borrowers.
The KPPU again rejected that argument, saying price fixing does not require competitors to charge identical prices.
Instead, the regulator argued that coordinated price ceilings can still reduce competitive independence and facilitate parallel pricing behavior.
According to the KPPU, setting interest-rate ceilings above market equilibrium levels shaped lenders’ pricing expectations and reduced price competition across the online lending sector.
Endah told the court that international antitrust principles recognize price coordination schemes — including price ceilings — as potential forms of cartel conduct where they weaken market competition.
The regulator therefore argued that the lenders’ objections were “legally baseless” and should be dismissed in their entirety.
The appeals challenge one of the KPPU’s largest competition cases to date. In March, the regulator imposed total fines of 755 billion rupiah ($42.6 million) on 97 online lenders, marking the largest penalty ever issued by the KPPU in a single case.
The ruling imposed fines ranging from 1 billion rupiah to 102.3 billion rupiah, with fintech lender AdaKami receiving the largest penalty.
Source: MLex
