January 21, 2025 - Google LLC was proven to have committed monopolistic practices (Article 17) and abused of dominant position to limit the market and technological development (Article 25 paragraph (1) letter b) in Case No. 03/KPPU-I/2024 concerning Alleged Violation of Law Number 5 Year 1999 related to the Implementation of Google Play Billing System. For this violation, the Commission Panel imposed a fine of Rp202.5 billion (equivalent to USD 12.65 million) and ordered Google LLC to stop the mandatory use of Google Play Billing in the Google Play Store. The Commission Panel also ordered Google LLC to announce the provision of opportunities for all application developers to participate in the User Choice Billing (UCB) programme by providing incentives in the form of service fee reductions of at least 5% (five percent) for a period of 1 year since this decision becomes legally binding. The decision was read out on the 21st January 2025 by the Commission Panel chaired by Hilman Pujana with Mohammad Reza and Eugenia Mardanugraha as Panel Members.

For information, this case was initiated by KPPU for alleged violations of Article 17, Article 19 letter a and letter b, and Article 25 paragraph (1) letter a and letter b of Law No. 5 Year 1999 by Google LLC. Google LLC requires application developers that distribute their applications through the Google Play Store to implement the Google Play Billing System (GPB System) and imposes sanctions if the application developer does not comply in the form of removal of the application from the Google Play Store. Google LLC applies a service fee in implementing the GPB System of 15%-30%. The Commission Panel conducted a preliminary examination of this case since 28 June 2024 and ended at the follow-up examination stage on 3 December 2024.

In its Decision, the Commission Panel through a multi-sided market analysis explained that Google Play Store is a digital platform that connects application developers and application users by providing the GPB System feature as a billing system in payment transactions for in-app purchases of digital products and services. The relevant market in this case is the distribution of digital applications and services through a digital platform that can be pre-installed on all smart mobile devices with an Android-based mobile operating system in the territory of Indonesia during the alleged violation period from 1 June 2022 to 31 December 2024. Based on the facts of the trial as well as market structure analysis, the Commission Panel considers that Google Play Store is the only application store that can be pre-installed on all Android-based smart mobile devices by controlling more than 50% (fifty per cent) of the market share.

Google's behaviour of requiring the use of the GPB System for every purchase of digital products and services distributed in the Google Play Store and not allowing the use of other payment alternatives in the GPB System, caused various impacts to its users. During the trial, various impacts felt by app users on the implementation of the GPB System policy led to limited choices of available payment methods. 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.

Another policy implemented by Google LLC is the imposition of sanctions in the form of removing applications from the Google Play Store and not allowing updates to applications if application users do not comply with these obligations. As a result, several apps disappeared from the Google Play Store because app developers did not follow the GPB System policy. Not only that, app developers also face challenges in customising the user interface and user experience, which adds to the complexity of maintaining the competitiveness of their apps in the market.

Based on the evidence and facts revealed in the trial, the Commission Panel concluded that Google LLC was legally and convincingly proven to have violated Article 17 and Article 25 letter b of Law No. 5 Year 1999, but there was insufficient evidence for the alleged violations of Article 19 letter a and letter b, as well as Article 25 paragraph (1) letter a. For these violations, the Commission Panel decided to order Google LLC to pay a fine of Rp202,500,000,000 (two hundred two billion five hundred million rupiah) which must be deposited into the State Treasury as revenue from fines for violations in the field of business competition. In addition, the Commission Panel also ordered Google LLC to stop the mandatory use of Google Play Billing in the Google Play Store. The Commission Panel also ordered Google LLC to announce the provision of opportunities for all application developers to participate in the User Choice Billing (UCB) programme by providing incentives in the form of service fee reductions of at least 5% (five percent) for a period of 1 year, since this decision has permanent legal force.

Payment of the above fines must be paid within 30 (thirty) days after the Decision becomes final. If Google LLC is late in paying the fine, then in accordance with the provisions of the regulations on non-tax state revenue, the Commission Panel also orders Google LLC to pay a late fine of 2% (two per cent) per month of the value of the fine. If you file an objection to the KPPU Decision, then in accordance with Article 12 paragraph (2) of PP No. 44 of 2021, Google LLC is required to submit a bank guarantee of 20% (twenty per cent) of the value of the fine. (/DN)