Google Fined $12.6M in Indonesia for Monopolistic Practices

Indonesia Fines Google for Antitrust Violations

Indonesia’s KPPU, the nation’s antitrust agency, has imposed a fine of 202.5 billion Rupiahs on Google. This amount is equivalent to $12.6 million USD, and stems from violations concerning the company’s payment system services within the Google Play Store.

Mandatory Billing System Challenged

The KPPU has directed Google to discontinue the requirement of utilizing Google Play Billing as a mandatory payment method within the Google Play Store. Furthermore, the agency is requesting that Google extend participation in the User Choice Billing (UCB) program to all developers.

A minimum service fee discount of 5% is also mandated, to be applied for a period of one year following the finalization of this decision, as detailed in the agency’s official statement.

Investigation Findings

An investigation initiated by the antitrust watchdog in 2022 focused on Google’s dominant market position. The core issue was Google’s insistence that Indonesian app developers employ Google Play Billing (GPB) for transactions.

The agency’s findings revealed that the Google Play Billing system levied fees reaching up to 30%, exceeding those of alternative payment platforms.

Impact of Limited Payment Options

The Google Play Store facilitates payments between developers and users through the GPB System for in-app purchases. Google mandates that all purchases of digital products and services within the store are processed via Google Play Billing.

Simultaneously, the company restricts the use of payment methods that are not Google Play Billing. The KPPU asserts that this limitation of payment choices resulted in a smaller user base for apps, fewer completed transactions, and diminished revenue for developers.

Google’s Market Share in Indonesia

The Google Play Store is the sole app store pre-installed on all Android devices, commanding a market share exceeding 50%. In the search engine market, Google maintains a substantial lead with a 95.16% share as of January 2024.

Other search engines, including Bing, Yahoo!, DuckDuckGo, and Yandex, collectively account for the remaining portion of the market, according to data from Statista.

Google’s Response

Google intends to formally appeal the KPPU’s ruling. A spokesperson, Danielle Cohen, expressed strong disagreement with the decision.

“We strongly disagree with the KPPU’s decision and will appeal. Our current practices foster a healthy, competitive Indonesian app ecosystem, offering a secure platform, global reach, and choice, including user choice billing — which enables alternatives to Google Play’s billing system,” Cohen stated.

Commitment to Indonesian Developers

Google highlighted its ongoing support for Indonesian developers through various initiatives. These include the Indie Games Accelerator, Play Academy, and Play x Unity programs.

The company reiterated its commitment to adhering to Indonesian law and continuing collaboration with the KPPU and other stakeholders throughout the appeals process.

Global Scrutiny of Google’s Practices

The tech industry is closely monitoring a series of legal challenges involving Google and fines related to anti-competitive behavior. These cases stem from concerns about the misuse of its dominant market power in numerous countries.

These countries include Indonesia, India, South Korea, France, the EU, and the U.S. Nikkei Asia reports that Japan’s antitrust regulator is poised to determine that Google has violated Japanese antitrust laws.

Consequently, the regulator is expected to order the tech giant to cease its monopolistic practices.