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Indonesia Fined Google
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Indonesia Fines Google $12.6 Million for Monopolising Play Store Billing System

Indonesia has fined Google $12.6 million for antitrust practices. Indonesia’s competition agency, KPPU penalized the search giant for violating antitrust rules on its Google Play payment system service, TechCrunch reported.

Google Investigation

Indonesia’s antitrust body KPPU commissioned investigations into Google’s market dominance back in 2022. Specifically, the search giant required app developers in Indonesia to use the Google payment system available on its Play Store. The Indonesia antitrust body’s investigation showed that this Billing system charged app developers up to 30% more fees than other payment systems.

Google has designed its Play Store to handle in-app purchase payments between users and developers via its Google Play Billing System. The search giant requires that all purchases of digital services and products in the Google Play Store be channeled through this billing system.

Google’s behaviour of requiring the use of the Google Play Billing System for every purchase of digital products and services distributed in the Google Play Store and not allowing the use of other payment alternatives in the GPB System, caused various impacts to its users,” the KPPU said in its statement.

The search engine also prohibits alternative payment options to Google Play Billing. In its statement, KPPU argued that by limiting payment options on Google Play Store resulted in few app users. This meant less transactions and lower revenues for app developers.

KPPU Directive

In addition to the fine, KPPU directed Google to terminate the mandatory use of Google Play billion in its Play Store. The competition watchdog ordered the US search giant to allow developers access to the User Choice Billing program.

As a remedy for Google’s monopolistic practices, the Indonesian agency has asked the company to give developers at least 5% discount on service fee. The discount should run for a year following finalization of the decision.

KPPU said that Google must settle the $12.6 million fine within 30 days after the decision is finalized. Should Google delay the payment, Indonesia will apply a late penalty of 2% of the fine amount each month.

The competition watchdog noted that Google Play Store is the single app store that is pre-installed in Android devices. This alone allows the search engine access to more than 50% market share. This is in addition to the 95.16% market share that the company has in the search engine market in Indonesia. Search engines like DuckDuckGo, Yahoo, and Bing held the remaining share as of January 2024.

Google’s Reaction

Google has expressed its commitment in complying with Indonesian regulations. The search giant has also said that it will appeal the ruling issued by the KPPU. The search giant argued that its practices support healthy competition in the app development ecosystem.

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. Beyond our platform, we actively support Indonesian developers through a comprehensive suite of initiatives, including Indie Games Accelerator, Play Academy, and Play x Unity, reflecting our deep investment in their success. We remain committed to complying with Indonesian law and will continue collaborating with the KPPU and stakeholders throughout the appeals process,” Google spokesperson Danielle Cohen said in a statement.

Google is currently facing a series of legal suits for violating antitrust practices and abuse of its dominant market power. Besides Indonesia, the search giant has been slapped with hefty fines by India, France, South Korea, the EU and the US.

James Hughes
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