The Business Competition Supervisory Commission (KPPU) has decided to impose a substantial fine of IDR 202.5 billion ($12.4 million) on Google LLC after determining that the tech giant violated several key regulations under Indonesia’s Law Number 5 of 1999, which governs the prohibition of monopolistic practices and unfair business competition.
The ruling follows an in-depth investigation and legal proceedings that concluded Google’s business practices had significant adverse effects on competition within the Indonesian market.
According to the KPPU Panel, which read out the Decision for Case Number 03/KPPU-I/2024, Google was found to violate two specific articles of Law Number 5 of 1999.
The KPPU Panel in reading the Decision of Case Number 03/KPPU-I/2024 led by Commissioner Hilman Pujana as Chairman of the Commission Panel explained that there were two articles violated by Google LLC.
“Stating that the reported party is not proven to have violated Article 25 paragraph 1 letter a of Law Number 5 of 1999. Stating that the reported party is legally and convincingly proven to have violated Article 25 paragraph 1 letter b of Law Number 5 of 1999,” said Hilman Pujana at the KPPU Office, Central Jakarta, Tuesday, 21 Januari 2025, as reported by Detikcom.
The first violation relates to Article 17 of the law, which addresses monopolistic practices and unfair business competition.
The second violation pertains to Article 25, paragraph 1, letter b, which involves Google’s dominant position in the market and its actions to prevent consumers from accessing competing products or services that could offer better prices or quality.
However, the KPPU also clarified that Google had not violated other provisions of the same law, including Article 19, letters a and b, and Article 25, paragraph 1, letter a. Specifically, the commission concluded that there was insufficient evidence to support claims that Google engaged in practices under these articles.
Decision and Immediate Actions Required
The KPPU’s ruling also included specific actions that Google must take to remedy the situation. The commission has ordered that Google cease its obligation to use the Google Play Billing (GPB) System within the Google Play Store.
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This decision is significant, as it would allow app developers in Indonesia to have more freedom in choosing billing systems, thus promoting more competitive practices in the app marketplace.
Additionally, the KPPU Panel has mandated that Google provide opportunities for all app developers to participate in the User Choice Billing (UCB) program. This program aims to reduce developers’ financial burden by offering incentives such as a minimum 5% reduction in service fees within one year of the decision being legally enforced.
The ruling also requires that Google implement these changes no later than 30 days after the decision becomes legally binding. Furthermore, Google must submit proof of payment for the imposed fine to the KPPU within the prescribed timeframe.
Google’s Response: Rejection and Appeal Plans
Despite the KPPU’s ruling, Google has expressed its disagreement with the decision. In a statement, the company strongly rejected the fine and the findings of the commission, maintaining that its current business practices have had a positive and supportive impact on Indonesia’s app ecosystem.
Google has announced its intention to file an appeal against the KPPU’s decision, stating that it does not believe its actions have harmed competition or consumers in the Indonesian market.
As of now, the situation remains unresolved, and the appeal process will determine whether the fine and other measures outlined by the KPPU will be upheld or modified.
