Indonesia‘s antitrust agency, the KPPU, has imposed a significant fine on Google, amounting to 202.5 billion Rupiahs, equivalent to $12.6 million. The fine addresses Google’s monopolistic practices concerning its payment system services in the Google Play Store. The KPPU has ordered Google to discontinue the mandatory use of Google Play Billing, which has been criticized for charging fees as high as 30%, significantly more than other payment systems.
The Google Play Store, pre-installed on all Android devices, holds over a 50% market share, making it the dominant app store in Indonesia. Google’s policy requires all digital product and service purchases through the store to utilize its billing system. This dominance has led to scrutiny, with the KPPU mandating that Google allow developers to join the User Choice Billing (UCB) program and provide a minimum 5% service fee discount for one year following the decision’s finalization.
Google’s Response and Appeal
Google plans to contest the ruling. A spokesperson for the company, Danielle Cohen, emphasized Google’s commitment to fostering a competitive app ecosystem in Indonesia.
“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,” said Danielle Cohen, Google spokesperson.
Google’s market influence extends beyond app stores into search engines, where it commands a 95.16% share in Indonesia. Other search engines like Bing and Yahoo! hold minimal market presence. This market dominance prompted an investigation into Google’s practices in 2022.
The tech industry is closely observing legal disputes involving Google worldwide for similar anti-competitive conduct due to its substantial market power. Critics have particularly targeted Google’s payment system for its steep fee structure. Despite these challenges, Google highlights its initiatives aimed at supporting Indonesian developers.
“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,” added Danielle Cohen.
Author’s Opinion
The KPPU’s decision to fine Google and demand changes in its billing practices signifies a critical step towards curbing monopolistic behavior in digital marketplaces. While Google’s appeal is anticipated, the enforcement of such regulations is crucial for maintaining a fair competitive landscape. This case underscores the global challenge of balancing corporate dominance with the need for a diverse and accessible market environment, especially in regions where digital access and equity are still developing.
Featured image credit: redgreystock via Freepik
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