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Tech giant Google has told Vixio that it will appeal against an antitrust fine in Indonesia that was issued in relation to its payments practices within the Google Play Store.
Last week, Indonesia’s Competition Commission (KPPU) fined Google IDR202bn ($12.6m) for forcing app developers to use its proprietary billing system to accept payments for digital goods and services.
On Wednesday (January 22), the KPPU issued the fine to Google alongside an order to end its mandatory use of Google Play Billing within the app store.
However, as Google pointed out in communications with Vixio, it had already introduced a pilot of “user choice billing” for non-gaming apps in Indonesia in 2023.
“Based on the understanding of the press release announced by KPPU, we strongly disagree with the KPPU's decision and will appeal,” a Google spokesperson said.
“Our current practices foster a healthy, competitive Indonesian app ecosystem, offering a secure platform, global reach, and choice, including user choice billing — which enables alternatives to Google Play’s billing system.”
Following the order, Google must now give all Android app developers in Indonesia the freedom to choose their own billing agents within the Google Play Store.
Moreover, for a period of one year following the order, the firm must incentivise developers to partake in user choice billing by offering reductions of at least 5 percent on its commission fees.
This part of the order is similar to what Google already offers under the pilot scheme to non-gaming apps, who can secure a 4 percent discount on commissions by using their own billing system.
However, the KPPU notes correctly that Google’s standard commission fees are typically between 15 and 30 percent per transaction.
Google’s strict enforcement of proprietary billing
Prior to the order, Google required all app developers in Indonesia to use Google Play Billing to receive payments, and could remove apps from the app store if developers did not comply.
The KPPU notes that Google’s restriction of alternative payment methods harmed app developers by reducing the number of users of their apps, and decreasing their revenues.
In turn, this caused developers to increase the prices of their digital goods and services offered via the Google Play Store, therefore harming consumers.
The KPPU also notes that Google’s use of sanctions against non-compliant apps caused “anxiety” for developers, who were forced to make prescriptive changes to their apps’ user interfaces.
This added to the complexity of app development and distorted competition within the market, it said.
Moreover, several apps, after defying Google’s policies, found themselves "disappeared" from the Google Play Store.
User choice billing spreads
Indonesia is one of a growing list of markets where Google has been forced by regulators to introduce user choice billing within the Google Play Store.
In 2023, the firm settled a major antitrust lawsuit with 50 US state attorneys general, who accused it of maintaining a monopoly over in-app payments on Android
During the same year, Google agreed to implement user choice billing in the UK, after being threatened with enforcement action by the Competition and Markets Authority (CMA).
India, South Korea and the European Economic Area (EEA) were also among the first jurisdictions to enable user choice billing for Android app developers.
However, use of Google Play Billing remains mandatory in many other markets.
