Google fined by KPPU over Google Play Billing
Google Play Billing policy violates competition rules in Indonesia.
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| Signage at Google's headquarters in Mountain View, California, United States, on Thursday, October 10, 2024. Photo by David Paul Morris/Bloomberg/Getty Images |
By Anna Fadiah and Clarisa Sendy
Google was recently fined $13 million dollar (Rp202 billion) by the Indonesian Competition Commission (KPPU) over its Google Play Billing policy, which was deemed a violation of Indonesia’s Competition Law. The policy mandates the use of Google’s internal payment system for all digital transactions within the Google Play Store ecosystem. This decision has drawn widespread attention, particularly among local software developers who rely heavily on the platform.
Google Play Billing allows developers to sell paid apps, digital goods, or in-app services to users worldwide. However, the system also enforces service fees for developers using the platform—a policy that KPPU claims limits options for developers and consumers alike.
Google Play Billing is a payment system designed to support digital transactions within the Google Play Store ecosystem. Key features of the system include:
- Security: Google Play Protect ensures a secure payment experience.
- Ease of Transactions: Users can make payments using local methods like credit cards, vouchers, and other market-specific options.
- Developer Support: The system helps developers distribute their apps to over three billion Android users in 190 countries.
Google claims that only 3% of developers are charged service fees, with the remaining 97% distributing free apps without any charges. For those who do pay, most are charged 15% or less, depending on the app category and applicable programs.
Despite these claims, KPPU believes the policy negatively impacts fair competition in Indonesia.
In Indonesia, Google Play Store plays a pivotal role in the digital ecosystem. According to Google Indonesia’s official website, over 10,000 local developers use the platform for their businesses. Approximately 150 million users in Indonesia access Google Play Store monthly to discover apps and games.
While the platform provides developers access to a vast global market, the mandatory use of Google Play Billing creates a dependency on Google’s internal systems, reducing flexibility in choosing alternative payment methods.
KPPU asserts that requiring developers to use Google Play Billing restricts choices for both developers and consumers, violating principles of fair competition. Google’s mandate for service fees through its internal system has been deemed unfair.
“This policy forces developers to follow Google’s rules without offering any alternatives. It creates a monopoly in the digital payment system,” said a KPPU representative.
KPPU also noted that Google exploits its dominant market position without adequately considering its impact on the local digital ecosystem.
In response to KPPU’s ruling, Google announced plans to appeal the decision. The company maintains that the Google Play Billing policy is designed to foster a competitive app ecosystem while ensuring safe options for users and developers.
“We believe this policy offers long-term benefits for all stakeholders, including local developers in Indonesia. We will continue to work with authorities to clarify the policy,” a Google spokesperson stated.
Google also highlighted that its payment system enhances digital transaction security, minimizes fraud risks, and simplifies payment processes for users.
KPPU’s fine has sparked broader discussions about how Google’s policies affect local developers. For many in Indonesia, Google Play Store is the primary platform for app distribution. However, the mandatory use of Google Play Billing can be an additional burden, especially for small developers with limited resources.
“The mandatory payment system reduces our flexibility to offer alternative methods to users, which impacts our revenue,” said a local developer who requested anonymity.
While some developers acknowledge the system’s benefits, such as global market access and security, they hope for more flexible payment options to ensure healthy competition.
This case highlights the challenges regulators face in managing competition in the digital era. Global platforms like Google often have extensive reach but may implement policies that conflict with local regulations.
KPPU hopes this fine will serve as a reminder for other companies to consider the impact of their policies on local digital ecosystems. Meanwhile, the government needs to strengthen regulations to ensure fair competition amid rapid technological advancements.
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