Validity of the AFPI Code of Conduct under Contract and Competition Law

Abstract

AFPI's association-wide ceiling on online-lending charges raises a difficult question at the intersection of contract and competition law. This normative legal study examines whether the AFPI Code of Conduct creates valid private-law obligations and when its lending-rate provision may constitute a prohibited horizontal price-fixing agreement. Using statutory, conceptual, and case approaches, it examines Articles 1320 and 1337 of the Indonesian Civil Code, Articles 1(7), 5(1), 5(2)(b) and 50(a) of Law No. 5 of 1999, AFPI instruments issued in 2021 and 2023, OJK regulation and KPPU Decision No. 05/KPPU-I/2025. The analysis distinguishes association-member obligations from agreements among competitors, and the validity of an association instrument from that of an individual pricing clause. A common maximum rate may become a coordinating reference point even without identical final prices, but regulatory compliance must be distinguished from independent competitor coordination. OJK's reported direction does not, by itself, establish the availability of statutory exemptions. The article proposes a sequential assessment of organisational authority, horizontal commitment, competitive pricing content, statutory mandate and legal consequences. This approach protects the distinct functions of consumer protection and competition law.