Google Fined IDR 202.5 Billion by KPPU for Monopoly Practices in Indonesia
In a landmark decision,the Business Competition Supervisory Commission (KPPU) has imposed a hefty fine of IDR 202.5 billion on Google LLC for violating Indonesia’s anti-monopoly laws.The ruling, delivered on Tuesday, January 21, 2025, marks a critically important moment in the ongoing battle against unfair business practices in the digital marketplace.
The case, officially registered as case Number 03/KPPU-I/2024, was presided over by Commissioner Hilman Pujana, Chair of the KPPU Council, alongside Commissioner Eugenia Mardanugraha and Commissioner Mohammad Reza. The decision stems from Google’s alleged monopolistic practices tied to its Google Play Billing (GPB) System, which has been a point of contention among app developers and regulators alike.
The Violations
Table of Contents
Google LLC was found guilty of violating two key articles under Law Number 5 of 1999, which governs the prohibition of monopolistic practices and unfair business competition in Indonesia.
- Article 17: This article pertains to the occurrence of monopolistic practices and/or unfair business competition.
- Article 25 Paragraph 1 Letter B: This provision addresses the abuse of a dominant position, preventing consumers from accessing competing goods or services in terms of price and quality.
However, the KPPU clarified that Google did not violate Article 19 Letter A and B or Article 25 Paragraph 1 Letter A of the same law.
In his statement, Hilman Pujana emphasized, “Declaring that the reported party has not been proven to have violated Article 25 paragraph 1 letter a of Law Number 5 of 1999. Declaring that the reported party has been legally and convincingly proven to have violated Article 25 paragraph 1 letter b of Law Number 5 of 1999.”
The Penalties
The KPPU’s decision carries several significant penalties for Google LLC:
- A fine of IDR 202.5 billion, to be deposited into the state treasury.
- An immediate halt to the mandatory use of the Google play billing System in the Google Play Store.
- A requirement to announce the User choice Billing (UCB) program, offering developers a 5% service fee reduction for one year after the decision becomes legally binding.
- Submission of a 20% bank guarantee of the fine value within 14 days if Google files an objection.
- A 2% monthly late fee if the fine is not paid on time.
Google has 30 days to implement the decision and must submit proof of payment to the KPPU. Failure to comply could result in further penalties.
The Backstory
The case originated from allegations that Google was enforcing the use of its GPB System for all app transactions on the Google Play Store. Developers who refused to comply faced the threat of having their apps removed from the platform. The GPB System, which charges a 15-30% service fee on in-app purchases, has been criticized for stifling competition and limiting consumer choice.
What’s Next?
Google has the option to appeal the decision within 14 days of receiving the KPPU’s ruling. If no objection is filed, the decision will stand as final. Notably, Google’s legal representatives were absent during the reading of the verdict, raising questions about the company’s next steps.
Key Takeaways
The KPPU’s decision underscores Indonesia’s commitment to fostering fair competition in the digital economy. It also sets a precedent for how global tech giants are regulated in emerging markets.
| Key Details | Summary |
|————————————-|—————————————————————————–|
| Fine Imposed | IDR 202.5 billion |
| Violated Articles | Article 17 and Article 25 Paragraph 1 Letter B of Law Number 5 of 1999 |
| Main Issue | Mandatory use of google Play Billing System |
| Deadline for Compliance | 30 days after the decision becomes legally binding |
| Appeal Window | 14 days after receiving the decision |
This ruling is a wake-up call for tech companies operating in Indonesia, signaling that monopolistic practices will not be tolerated.For developers and consumers, it’s a step toward a more equitable digital ecosystem.
For more details on the case, you can read the full report on Bloomberg Technoz or Detik Finance.
What are your thoughts on this landmark decision? Share your opinions in the comments below!
Headline:
Rethinking Digital Marketplace Fairness: A Conversation on Indonesia’s Landmark Google Anti-Monopoly Ruling
Introduction:
Today, we’re delighted to host a compelling discussion on a topic that’s been making waves in the global tech industry and digital economy. Joining us is Yudiiris Widijanto, a seasoned tech law expert who has been closely following the Business Competition Supervisory Commission (KPPU)’s decision to fine Google IDR 202.5 billion for monopolistic practices in Indonesia. Let’s dive into the intricacies of this landmark ruling and its implications.
1. The fined violations: unpacking the KPPU’s decision
Senior Editor (SE): Yudiiris, let’s start at the heart of this case. Could you shed some light on the specific violations that led to this massive fine against Google?
Yudiiris Widijanto (YW): Sure. The KPPU found Google guilty of violating two key articles under Law Number 5 of 1999. Firstly, Article 17, which prohibits monopolistic practices and unfair business competition. Secondly, Article 25 Paragraph 1 Letter B, which addresses the abuse of a dominant position, preventing consumers from accessing competing goods or services. The improper mandatory use of the Google Play Billing System was at the core of these violations.
2. The Google Play Billing System in question
SE: This Google play Billing System has been a point of contention. Can you explain how it operated and why it was problematic in the eyes of the KPPU?
YW: The Google Play Billing System (GPB) charges a 15-30% service fee on in-app purchases. The problem, according to the KPPU, lies in Google’s requirement that developers use this system exclusively for all app transactions, preventing them from using alternative payment systems. This mandatory use led to higher fees for developers, ultimately leading to increased prices for consumers, and stifling competition.
3.Implications for Google and the tech industry
SE: Google has the right to appeal. What might happen next, and how does this ruling impact not just Google, but the broader tech industry?
YW: If Google doesn’t appeal within 14 days, the decision stands as final. For Google, this means they’ll have to stop mandating the use of their billing system and offer a 5% service fee reduction through the User Choice Billing programme. for the tech industry, this ruling sets a precedent for how global tech giants are regulated in emerging markets, promoting fair competition and protecting consumer choice.
4. A win for Indonesia’s digital economy
SE: This decision underscores Indonesia’s commitment to fostering fair competition in the digital economy.How does this ruling benefit Indonesia and its consumers?
YW: by cracking down on monopolistic practices, the KPPU is creating a more level playing field for domestic and international app developers in Indonesia. This should lead to more innovation, fairer pricing, and a wider range of choices for Indonesian consumers.It’s a significant step towards a more equitable digital ecosystem.
We thank Yudiiris Widijanto for his insightful contributions to this discussion. For more details on the case,you can read the full report on Bloomberg Technoz or Detik Finance.Join the conversation and share your thoughts on this landmark decision in the comments below.