Google has been subjected to monopoly violations once more, this time by an Asian nation. Google was fined $12.6 million by Indonesia’s antitrust agency, KPPU. The allegation concerns its payment system services for the Google Play Store.
The Commission Panel, chaired by Hilman Pujana and consisting of Mohammad Reza and Eugenia Mardanugraha, announced the decision on January 21, 2025. As a result of the violation, it ordered Google to cease the mandatory use of Google Play Billing (GPB) in the Google Play Store.
Google hit with $12.6M fine in Indonesia for monopolistic practices in payment system https://t.co/9ebY97UnUk pic.twitter.com/iEreQQSG5t
— Livio Andrea Acerbo (@AcerboLivio) January 22, 2025
The Commission Panel also directed Google LLC to announce the availability of opportunities for all application developers to participate in the User Choice Billing (UCB) program. This will be achieved by offering incentives in the form of service fee reductions of at least 5% for a period of one year, starting upon the legally binding nature of this decision.
After the decision becomes final, the fines must be paid within 30 days. However, if Google fails to pay the fine in a timely manner, the Commission Panel will also require Google to pay a late fine of 2% per month of the fine’s value.
The investigation- Details
The antitrust watchdog initiated an investigation into Google for its market dominance in 2022. They found that the company mandated that Indonesian app developers use GPB for in-app purchases. In addition, the agency found that the GPB system had imposed fees of up to 30%, which was higher than those of other payment systems.
Apparently, Google demands that all digital products and services purchased from the Google Play Store be processed through the GPB system. Why is it a problem? It restricts alternative payment methods to GPB. Hence, the monopoly.
According to the agency, restricting payment options resulted in a reduction in app users, transactions, and revenue. This means that, to some extent, it is also affecting Google.
Google has also created a policy to remove applications from the Google Play Store. Users who fail to comply with these duties will also have their application updates suspended.
Furthermore, the challenges that app developers face when customizing the user interface and user experience add to the complexity of maintaining their applications’ market competitiveness.
Google Play Store is the sole app store that is pre-installed on all Android devices, with a market share exceeding 50%.
According to Statista, Google dominated the Indonesian search engine market with a 95.16% market share, while Bing, Yahoo, DuckDuckGo, and Yandex made up the remaining search engines.
Google’s response
A Google spokesperson, Danielle Cohen, said in an email statement, “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.”
She added, “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.”
In the case of an appeal, the Indonesia law requires Google to provide a bank guarantee of 20% of the fine value.
Google has been fined for violating anti-competitive practices due to its misuse of dominant market power in several countries. In fact, the US found Google to have violated antitrust law by illegally maintaining a monopoly in internet search.
In addition, India, South Korea, France, and the EU have also had issues with Google.
Notably, according to Nikkei Asia, Japan’s antitrust regulator is anticipated to conclude that Google has violated Japan’s antitrust laws. It will require the technology giant to cease its monopolistic practices.
In the event that you submit an objection to the KPPU Decision, Google LLC is obligated to provide a bank guarantee of 20% of the fine value.
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Source: https://www.cryptopolitan.com/google-fined-12-6m-indonesia-payment-system/