Jakarta, Indonesia Sentinel — The Indonesian Competition Commission (KPPU) has imposed a fine of IDR 202.5 billion (approximately $13.2 million) on Google for its allegedly unfair billing practices on the Google Play Store. The decision stems from accusations that Google’s billing system stifles competition and burdens app developers in Indonesia.
Details of the Ruling
The verdict, delivered under Case Number 03/KPPU-I/2024, was presided over by KPPU Commissioner Hilman Pujana, with Commissioners Eugenia Mardanugraha and Mohammad Reza serving as panel members.
The investigation began in 2022 when KPPU scrutinized Google’s mandatory Google Play Billing System (GPB) for app developers. The commission found that Google required Indonesian developers to use its billing system, charging a commission rate of up to 30%—higher than other payment methods. Developers who refused to comply risked having their apps removed from the Play Store, negatively impacting their revenue streams.
Monopoly Concerns
KPPU highlighted Google’s overwhelming market dominance, with the tech giant controlling 93% of the Indonesian digital distribution market. This dominance, coupled with its billing practices, was deemed unfair and anti-competitive.
According to Commissioner Hilman, Google violated two key provisions of Indonesia’s Competition Law (Law No. 5/1999):
- Article 17, which prohibits monopolistic practices and unfair business competition.
- Article 25, Section 1, Clause b, which addresses abuse of a dominant position to hinder consumer access to competitive goods and services.
However, KPPU found Google not guilty of violating other articles, including Article 19, Clauses a and b, and Article 25, Section 1, Clause a.
Penalties and Directives
In addition to the IDR 202.5 billion fine, KPPU directed Google to:
- Cease its mandatory Google Play Billing System (GPB) requirements.
- Introduce a User Choice Billing (UCB) program for developers, offering at least a 5% reduction in service fees for one year after the ruling becomes legally binding.
The fine is to be deposited into the state treasury as competition law violation penalties under specific revenue codes provided by KPPU.
KPPU’s Stance
“This ruling underscores the importance of fair competition in the digital economy. Google’s practices have not only reduced developers’ revenue but also restricted consumer choice,” said Commissioner Hilman Pujana during the decision announcement at KPPU’s Jakarta headquarters on January 21, 2025.
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Implications for Google Indonesia and Developers
The decision is a significant step in regulating dominant global tech players in Indonesia, one of the fastest-growing digital markets in Southeast Asia. By mandating the UCB program and imposing a hefty fine, KPPU aims to level the playing field for local developers and foster a more competitive digital ecosystem.
(Becky)
