Google fined $12.5 mln for unfair business practices in Indonesia

Indonesia's antitrust agency, KPPU, announced on Wednesday that it has imposed a fine of IDR202.5 billion ($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% 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% 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.

The agency also found that Google was charging a service fee of between 15% and 30% through Google Play Billing.

According to the agency, 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% due to increased service costs.

The KPPU said its investigation also showed that Google has imposed sanctions on those who do not use Google Play Billing by removing their 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.