KPPU Ruling vs Sharia P2P: When the State Speaks in Two Languages
The opinion piece “Who Protects Our Financial Services Industry?” published a few days ago has sparked discussion among players and observers in the financial sector. There, the financial services industry is depicted as a large ship battered by storms, with one of the strongest storms coming from the KPPU’s decision imposing fines of hundreds of billions on 97 P2P lending fintech companies.
As an observer of the economy and Sharia finance, I feel the need to elaborate on the question posed: when actors are licensed, supervised, and strive to follow regulator directives, to what extent are they truly protected when policies between state institutions appear to cross each other?
Previously, in the article “Sharia P2P in the Vortex of Competition Cases” on CNBC Indonesia, I emphasised that the Sharia label does not automatically exempt actors from prohibitions on horizontal price-fixing when they operate in the same market with the same figures.
This writing continues that discussion from a different perspective: no longer just about business actors’ behaviour, but about the architecture of state coordination that is not yet fully aligned, thus Sharia P2P often becomes the party caught in the crossfire of policies.
Two languages of the state for one market
From a legal perspective, this case is not merely a drama of “interest cartels”. It shows how the state seems to speak in two languages in front of business actors. OJK and KPPU both carry out mandates from laws, but appear without adequate orchestration. Amid this crossing of voices, Sharia P2P is dragged in as a party affected.
Normatively, the positions of both authorities are clear. OJK operates with a mandate for consumer protection and financial system stability, where the maximum limit of “economic benefit” is designed as a fence to prevent predatory practices and “sky-high interest” from recurring.
On the other hand, KPPU adheres to the prohibition of agreements on price determination among competitors in Article 5 of Law No. 5/1999. When the majority of actors in the same market move around identical figures, suspicion of price coordination, whether explicit or tacit, is almost inevitable.
The problem is that the bridge between these two mandates is not yet strong. The economic benefit limit intended as a fence in the field is often read as a “safe number” or even an “industry standard number”. When that number is made a collective meeting point, KPPU reads it as price collusion. The result is policy disharmony: one hand of the state directs, the other punishes.
Sharia P2P is right at the knot of that disharmony. From the sector regulation side, they are subject to the “economic benefit” regime that does not strictly differentiate between interest and Sharia returns. Murabahah margins, mudharabah profit-sharing, and ijarah fees are all treated as compensation for fund usage.
From the competition law side, they are still viewed as business actors in the same market who must set returns independently, without agreements or alignment of figures with competitors.
Legitimate expectation and prohibition of arbitrariness
In the perspective of modern administrative law, this situation touches on the principle of legitimate expectation, namely protection of reasonable expectations of citizens towards the state, as discussed among others by Paul Craig and Gráinne de Búrca in their studies on protection of legitimate expectations and legal certainty in European Union law.
Simply put, business actors who are licensed, supervised, and follow official government signs have the right to expect that compliance does not immediately turn into the basis for sanctions, unless there is a clear independent violation.
This principle aligns with the General Principles of Good Governance in Indonesian administrative law, particularly the principle of legal certainty and protection of trust, which is extensively discussed by Philipus M. Hadjon, demanding that the state acts consistently and predictably. The policy of one organ must not simply break the expectations formed by the policy of another organ towards the same subject.
This doctrine is closely related to the prohibition of arbitrary actions (non-arbitrariness), namely the state’s obligation to use its authority in a reasonable, rational, and non-contradictory manner between institutions. In the framework of the General Principles of Good Governance, this demand is reflected in the principles of legal certainty, prudence, and justice in every administrative action.
In the context of the KPPU’s decision on 97 P2P lending companies, including Sharia P2P, an important question for Indonesia’s rule of law is: to what extent are the reasonable expectations of actors following OJK’s economic benefit limits truly protected, and to what extent can the potential for actions that feel containing elements of “arbitrariness” between institutions be reduced through stronger policy harmonisation and coordination.
Industry introspection: “safe number” that “does not secure”
Demanding the state to improve does not mean freeing the industry from the obligation of introspection. The challenges that arise are not because actors, including in the Sharia realm, deliberately ignore real calculations. The issue is more subtle: in practice, the maximum economic benefit limit is often read as a “safe number” whose appeal is strong, so some players tend to cluster at the same ceiling even though they have their own internal calculation bases.
In such situations, margins and profit-sharing that are truly formulated from cost structures, risks, and contract characteristics can appear from the outside as if following a uniform number pattern. In the eyes of competition law, the differentiation between “interest” and “Sharia returns” has the potential to diminish.
The risk is that contracts may differ on paper, but if price behaviour in the market moves in too similar a range, the space for interpretation of alleged uniformity opens up.