Expert Argues Against Unfair Competition Allegations in Fintech Lending Rate Caps

Regulatory Compliance Context Crucial in KPPU Investigation

A prominent legal expert, Prof. Ningrum Natasya Sirait, has argued that the alleged violation of business competition laws regarding fintech lending interest rate caps is not appropriately directed at businesses. The current investigation by the Indonesia Competition and Supervisory Commission (KPPU) is examining whether the Fintech Lending Association (AFPI)'s actions constitute unfair business practices.

Regulatory Directives vs. Business Collusion

Prof. Ningrum, a professor at the University of North Sumatra, emphasized that the rate cap implementation was a direct instruction from the Financial Services Authority (OJK), not a collusive business practice among companies. She stated, "When businesses act to comply with regulatory requirements, their motivation shifts from profit maximization to compliance and consumer protection."

Legal Doctrine Supporting Regulatory Compliance

The expert cited the 'regulatory defense' or 'state action doctrine', a legal principle recognized in many jurisdictions, which considers actions taken under regulatory instruction as lawful. This doctrine is crucial in distinguishing between lawful compliance and unlawful collusion.

Potential Industry Implications

Prof. Ningrum warned that investigating businesses for following regulatory directives could create a negative precedent for the fintech lending industry. She noted that such legal actions could lead to decreased investor confidence and business certainty in Indonesia's digital economy. The expert urged the KPPU to consider the compliance motivation and consumer protection objectives behind the rate cap implementation.

Regulatory Background

The OJK had previously explained that the interest rate cap was necessary to distinguish between legal and illegal fintech lending platforms and to establish a minimum standard for consumer protection. This regulatory measure aims to prevent excessive interest rates and protect consumers in the rapidly evolving fintech sector.