KPPU Sanctions 97 Lending Companies Involved in Loan Interest Cartel
JAKARTA - The Competition Commission (KPPU) has imposed a fine sanction on 97 business actors of information technology-based money lending services or online loans (pinjol) for violating loan interest cartel practices.
Head of the Public Relations and Cooperation Bureau of the KPPU, Deswin Nur, in a press release in Semarang, Thursday, said that the total fine to be paid by dozens of online loan service providers reached Rp. 755 billion.
Of the total number of business actors, he said, as many as 52 online loan service providers were given a minimum fine of IDR 1 billion.
According to him, the 97 online loan service providers were found guilty of violating Law Number 5 of 1999 concerning Prohibition of Monopoly Practices and Unhealthy Business Competition.
In the trial chaired by the Chairman of the Commission Assembly Rhido Jusmadi, he said, it was concluded that there had been an agreement on the determination of interest rates and/or economic benefits carried out by the respondents.
"The determination of the upper limit of interest rates that is far above the market equilibrium level is 'non-binding' and ineffective in protecting consumers," he said, quoted by Antara.
In addition, he continued, this condition also has the potential to be a mechanism that facilitates coordination of pricing among business actors.
He explained that the existence of the upper limit directs the expectations and pricing strategies of business actors, thereby encouraging the formation of behavioral alignment in interest rate setting.
As a result, according to him, the policy reduces the intensity of price competition and hinders the dynamics of competition in the online loan market.
In addition to imposing sanctions, he continued, the KPPU Assembly also made recommendations to the Financial Services Authority (OJK) to optimize the supervisory function related to online loans in accordance with laws and regulations so that there are no regulatory gaps and limit associations in setting behavioral guidelines that include anti-competition provisions.