Google Fined $12.6M in Indonesia for Monopolistic Practices

Google Gets Fined for Payment System Abuses

Indonesia’s antitrust agency, KPPU, has fined Google 202.5 billion Rupiahs ($12.6 million) for anti-competitive practices related to its Google Play Store payment system. Another hit for the tech giant’s market dominance.

Mandatory Google Play Billing Under Fire

KPPU’s investigation found that Google forced Indonesian app developers to use Google Play Billing (GPB) for in-app purchases, with fees up to 30% higher than other payment systems. Alternative payment methods are prohibited for developers, resulting in lower user engagement, transaction volume, and revenue for app developers.

KPPU has ordered Google to stop forcing developers to use GPB in the Play Store and allow all developers to participate in the User Choice Billing (UCB) program. Developers must also get a 5% service fee discount for a year after the decision is final.

Market Monopoly and Impact

KPPU’s findings showed Google’s stranglehold on the Indonesian market. By not allowing developers to provide other payment methods, there were fewer transactions, lower user engagement and less money for app creators. Google search engine also dominates 95.16% of Indonesia’s search market, leaving competitors like Bing, Yahoo!, DuckDuckGo and Yandex with tiny shares, according to Statista.

Google’s Response

Google will appeal the decision, saying its practices promote a healthy app ecosystem. “Our current practices support a robust, competitive Indonesian app ecosystem by providing a safe platform, worldwide reach, and options. Including user choice billing that allows alternatives to Google Play’s billing system,” a Google official named Danielle Cohen stated.

The company emphasized its commitment to Indonesian developers through initiatives like Indie Games Accelerator, Play Academy and Play x Unity. Google also said it will comply with Indonesian law and work with KPPU and other stakeholders during the appeal process.

Global Context

Google’s antitrust issues go beyond Indonesia. The company has been penalized for similar practices in India, South Korea, France, EU and US. Reports say Japan’s antitrust regulator may also find Google in breach of its competition laws and impose more sanctions.

This Indonesian ruling is part of the growing global pushback against monopolistic practices in the tech industry, setting the stage for more legal scrutiny of Google’s business worldwide.