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September 16, 2022

Indonesia launches probe against alleged Google app payments misconduct

Indonesia’s anti-trust agency, Indonesia Competition Commission (ICC/KPPU), has opened an inquiry into an allegation that blames Google of using unfair business norms for its app-based payment services offered through Google Play Store.

The allegation also accuses Google, owned by Alphabet, of following monopolistic practices while offering payment services via its app.

This investigation, which is expected to be conducted within 60 working days, is similar to those carried out by other antitrust agencies across the globe against Google.

In a statement, ICC said: “The Commission suspects that Google has abused its dominant position, conducted conditional sales and discriminatory practices in the distribution of digital applications in Indonesia.”

The probe follows an initial research undertaken by ICC to look into the potential violations regarding business competition and other rules by Google and its subsidiaries in Indonesia.

This research found that the local app developers were required to pay 15% to 30% of the price of their sold digital content while using Google’s payment system, Google Pay Billing (GPB).

The fee is much more than other payments service providers, who charge less than 5% fee to the developers.

Non-compliance with the Google norm could result in the developers being removed from the Google Play Store, stated ICC.

In its research, ICC also found that the Google Play Store is the biggest application distribution platform in Indonesia. It has a market share of 93% in the country.

ICC added: “ICC also suspects that Google has practiced conditional sales (tying) for services in two different business models, namely by requiring application developers to purchase in bundle the Google Play Store application (digital application marketplace) and Google Play Billing (payment service).”

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