Google fined IDR 202 billion for antitrust violations in Indonesia

The Indonesian Competition Commission (KPPU) has imposed a fine of IDR 202 billion (US$12.4 million) on Google LLC for breaching antitrust regulations. The decision, announced on 21 January, concluded that Google violated Article 17 and Article 25(1)(b) of Indonesia's Anti-Monopoly Law (Law No. 5 of 1999).

Article 17 prohibits monopolistic practices and unfair business competition, while Article 25(1)(b) addresses dominant positions that hinder consumer access to competing goods or services.

The violations stemmed from Google's enforcement of its Google Play Billing (GPB) system, which requires developers distributing apps via Google Play Store to use GPB for in-app purchases. Developers face service fees ranging from 15% to 30%, significantly higher than the pre-GPB rate of 6%. Non-compliance results in app removal from the Play Store, Indonesia's leading app distribution platform with a 93% market share.

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The investigation into Alphabet's Google began in 2022, following suspicions that the tech giant abused its dominant position by mandating the use of its GPB system. This policy has been applied to a wide range of apps, including subscription services like education, fitness, music, and video applications, as well as apps offering digital items and cloud-based services.

The KPPU ordered Google to end the mandatory use of GPB, offer developers the User Choice Billing (UCB) program with a minimum 5% service fee reduction for one year, and pay the fine within 30 days. Failure to comply may result in a 2% monthly penalty on the fine amount.

Developers testified during the hearings that the GPB policy reduced user choice, increased app prices, and negatively impacted revenue and user experience. KPPU deemed these practices monopolistic and an abuse of Google's dominant position. Google retains the right to challenge the ruling in a commercial court within 14 days of the decision.

In a statement to MARKETING-INTERACTIVE, a Google spokesperson said, “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.”

The spokesperson added that beyond the platform, the company also actively supports Indonesian developers through a comprehensive suite of initiatives, including Indie Games Accelerator, Play Academy, and Play x Unity, reflecting its 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,” the statement read.

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