Google Fined for Unfair Business Practices

According to reporting from Light Reading; an independent B2B digital media platform, Indonesia’s antitrust agency, KPPU, announced Wednesday (22/1/25) that it has imposed a fine of IDR 202.5 billion (approximately USD 12.5 million) on Google for abusing its dominant market position to force local app developers to use its payment system services for the Google Play Store.

The fines must be paid within 30 days after the decision becomes final. Failure to comply could result in additional penalties of 2 percent per month.

Based on market structure analysis, the KPPU determined the Google Play Store is the only application store that can be pre-installed on all Android-based smart mobile devices. It controls more than 50 percent of the market share.

The KPPU order, which comes more than two years after an investigation was launched in 2022, found that Google violated the country’s anti-monopoly law by imposing the mandatory use of Google Play Billing services for in-app purchases and payments, says Light Reading, adding that they also found Google was charging a service fee of between 15 and 30 percent through Google Play Billing.

“The restriction of payment methods resulted in a decrease in the number of app users, a decrease in transactions, which correlated with a decrease in revenue, and an increase in app prices of up to 30 percent due to increased service costs,” the agency said in a statement.

Light Reading is reporting that the KPPU said its investigation also showed that Google has imposed sanctions on those who do not use Google Play Billing by removing apps from its app store and not allowing app updates.

The agency noted that app developers face challenges in customizing the user interface and user experience, adding to the complexity of keeping their apps competitive in the marketplace.

Google reportedly said that it would appeal the ruling. “We are committed to complying with Indonesian laws and will collaborate constructively with KPPU and relevant parties throughout the appeals process,” Google said, as quoted by the Jakarta Globe.

The company also claimed that its practices “foster a healthy, competitive Indonesian app ecosystem.” It highlighted its alternative billing program, User Choice Billing (UCB), which allows app developers to offer additional payment options.

In addition to the fines, the KPPU ordered Google to end the mandatory use of Google Play Billing in Indonesia. It also ordered the tech giant to open its UCB program to all local app developers. As part of the ruling, developers who join the program must receive at least a 5 percent discount on service fees for one year.

 

Source: Light Reading, Jakarta Globe

Stock image by Mizter_X94 from Pixabay

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