The Business Competition Supervisory Commission (KPPU) has found 97 peer-to-peer (P2P) lending fintech firms guilty of cartel practices related to loan interest rates.

Deswin Nur, Head of the KPPU’s Public Relations and Cooperation Bureau, said the companies violated Article 5 of Law Number 5 of 1999 on the Prohibition of Monopoly Practices and Unfair Business Competition.

The firms face fines totalling Rp755 billion (US$50.2 million).

According to Tempo, evidence presented during the trial showed the defendants had agreements to determine interest rates and economic benefits.

Deswin explained that setting an upper limit on interest rates well above the market equilibrium was non-binding and ineffective in protecting consumers.

He added that such limits may have facilitated price coordination, guiding business players’ expectations and reducing competitive pressure in the online loan market.

The case has been ongoing since last year. Previously, the Indonesian Joint Fintech Association (AFPI) rejected allegations that there was any agreement to fix maximum interest rates.

The OJK also confirmed that AFPI’s regulation of maximum interest rates followed its directives.

Agusman, Executive Director of Supervision of Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Services Institutions at OJK, said,

“The determination of economic benefit limits by AFPI was carried out to protect the public from high-interest rates, maintain the integrity of the lending industry, and distinguish legal online loans from illegal ones.”

Deswin described the ruling as “one of the largest business competition cases ever handled by the KPPU, both in terms of the number of defendants and the industry’s direct impact on the general public.”

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