Google fined $12.6 million in Indonesia for payments system monopoly

Indonesia's antitrust agency KPPU fined Google 202.5 billion rupees (equivalent to $12.6 million) on Wednesday for violating antitrust regulations by providing payment system services for the Google Play Store.

The KPPU ordered the search giant to stop enforcing Google Play Billing on the Google Play Store. Google is also required to allow all developers to participate in the User Choice Billing (UCB) program and give them at least a 5% discount on service fees within one year of the decision being finalized, the statement said.

Antitrust regulators launched an investigation into its market dominance in 2022, specifically the company's requirement that Indonesian app developers use Google Play Billing (GPB). The agency found that the Google Pay settlement system charges fees as high as 30%, higher than other payment systems.

The Google Play Store handles in-app purchase payments between developers and users through the GPB system. Google requires that all digital products and services purchased in the Google Play Store go through the Google Play billing system. At the same time, it prohibits payment methods other than Google Play Billing. The agency said limiting payment options resulted in fewer app users, fewer transactions and lower revenue.

The agency noted that the Google Play Store is the only app store pre-installed on all Android devices, with a market share of over 50%. In terms of the search engine market, according to Statista, as of January 2024, Google accounted for 95.16% of the market share in the Indonesian search market, with other search engines such as Bing, Yahoo!, DuckDuckGo and Yandex accounting for the remaining shares.

Google plans to appeal the ruling.

“We strongly disagree with the KPPU's decision and will appeal. Our current approach fosters a healthy and competitive Indonesian app ecosystem, providing a secure platform, global reach and choice, including user choice billing – This enables an alternative to the Google Play billing system,” Google spokesperson Danielle Cohen said in an emailed statement. .

“In addition to our platform, we actively support Indonesian developers through a comprehensive range of programs, including the Indie Game Accelerator, Play Academy and Play x Unity, which reflects our strong investment in their success. We remain committed comply with Indonesian law and will continue to cooperate with the KPPU and stakeholders throughout the appeal process,” she added.

The tech industry has been closely watching a series of legal disputes involving Google being fined for anti-competitive violations in countries including Indonesia, India, South Korea, France, the European Union and the United States and Japan for abusing its market power. According to Nikkei Asia, antitrust regulators may determine that Google violated Japan's antitrust laws and order the technology giant to stop its monopolistic practices.