The Indonesia Competition Commission (locally known as KPPU) recently rendered a decision regarding Case No.03/KPPU-I/2024 involving Google LLC (Google) for violating Indonesian Competition Law¹ provision regarding the implementation of the Google Play Billing (GPB) system in Indonesia (Case). The fine imposed by KPPU for Google’s violation is the largest in the history of competition cases in Indonesia, amounting to IDR202.5 billion (approx. US$12.5 million).

In the Case, KPPU alleged that Google violated various provisions of the Competition Law relating to monopoly, market control, and dominance. After considering all the allegations and supporting evidence, KPPU concluded that Google had violated Articles 17 and 25(1)(b) of the Competition Law (regarding monopolies and the abuse of a dominant position, respectively).

Given the international attention and the substantial fine imposed, this client update will:

• provide a brief overview of the Case;
• briefly look at KPPU’s considerations in the Case; and
• comment briefly on KPPU’s decision and its aftermath.

Case overview

Between 1 June 2022 and 31 December 2024, Google imposed two new policies requiring companies that distributed their non-Google applications through Google Play Store (Play Store) to:

• use the GPB system; and
• charge the application developers a service fee of up to 30% of the purchase price for all sales of their applications through Play Store.

Application developers who did not comply with these two policies (New Policies) were sanctioned by having their applications removed from Play Store, resulting in significant market barriers and a more limited market for the application developers. Google’s New Policies had many consequences, including:

• the application developers receiving complaints and losing users because of the limited payment methods outside of the GPB system and higher prices to cover the increased service fee, resulting in a decrease in their revenue;
• changes to the user interface and user experience within the developer’s application, leading to a decrease in the application’s popularity and consequent downturn in sales;
• an increase in the application price due to the imposition of high service fees (up to 30%); and
• the creation of market barriers for competitors who intend to enter the application distribution market.

Following the commencement of the Case on 14 September 2022, Google filed a request with KPPU for a “change of conduct” on 13 June 2023, under which Google gave a written assurance to KPPU that it would take corrective action aimed at addressing the alleged anti-competitive behaviour. Although KPPU stated that it would approve Google’s request, KPPU required Google to also submit the following written statements by no later than 24 November 2023:

• an undertaking not to engage in anti-competitive behaviour and abuse its dominant position; and
• a change of conduct promise signed by a Google director.

However, Google failed to submit such statements in time, resulting in the Case progressing to the hearing stage.

KPPU’s considerations

One of KPPU’s key considerations underlying its finding of the Competition Law violations in the Case was the timing of Google’s imposition of the New Policies. When the application developers first signed up to Play Store, they were allowed to use other billing systems, making Play Store an economically favourable application distribution service for them. However, it was only after Play Store became popular that Google initiated the New Policies.

Application developers were only informed of the New Policies after they had already signed a developer distribution agreement with Google (DDA). Had they known of the New Policies before they signed the DDA, the application developers could have chosen alternative distribution platforms instead of Play Store.

As a result of its New Policies, Google essentially “locked-in” application developers, making them dependent on Play Store, since their successful applications had grown in popularity and gave the application developers a broad customer base. Such dependence pressured the existing application developers using Google Play to comply with Google’s terms, enabling Google to eliminate competition and hinder new competitors from entering the market. This “locked-in” position that application developers found themselves in following Google’s application of the New Policies highlights elements of Google’s monopolistic practices and abuse of its dominant position.

Some of KPPU’s further considerations in the Case are set out below.

• Article 17 of the Competition Law - Monopoly : Play Store was the only application pre-installed on all Android phones, giving it a market share of more than 50% in the application and digital content distribution market. Play Store’s pre-installation on Android based devices created a dependence by application developers on using Play Store to obtain and maintain customers, making it more difficult for them to switch to other platforms. This allowed Google to initiate the New Policies for its exclusive benefit, thereby limiting payment method options for application developers and consequently limiting competition. If application developers did not comply with Google’s New Policies, they faced the threat of having their application removed from Play Store. Having considered Google’s New Policies, KPPU concluded that Google’s behaviour regarding the mandatory use of the GPB system constituted monopolistic and unfair business competition practices.
• Article 19(a) and (b) of the Competition Law - Market control : KPPU determined that Google did not violate market control regulations. The relevant market for Google and Play Store was determined to be the distribution of applications and digital content. In contrast the GPB system functions as a billing system rather than a payment processor. Therefore, Google was not considered a competitor in the payment processing market or among application and digital content distributors. Since Google had no direct competitors in the application and digital content distribution market, there was no evidence that it had hindered consumers from interacting with alternative service providers who distribute applications and digital content.
• Article 25(1)(b) of the Competition Law - Dominance - KPPU found that:

1. Google held a dominant position due to its significant market share in the digital application distribution market;
2. Google’s dominance made it difficult for application developers to switch to other platforms, as doing so would involve significant financial costs and the risk of losing a large customer base; and
3. Google’s dominant position enabled Google to eliminate competitive pressure, effectively preventing the emergence of real competitors in the relevant market.

KPPU decision and the aftermath

In addition to fining Google, Google was also ordered to:

1. end its compulsory requirement for all application developers to use the Play Store GPB system; and
2. offer all application developers the opportunity to join the User Choice Billing program, with a minimum of a 5% service fee reduction for one year.

Google filed an appeal with the Commercial Court division of the Central Jakarta District Court on 7 February 2025 to challenge the KPPU decision. The Commercial Court must complete its examination of the appeal within one year. February 2025 to challenge the KPPU decision. The Commercial Court must complete its examination of the appeal within one year.

Despite the fine in this Case being the highest in KPPU’s history, Google has also been fined significantly higher penalties in other jurisdictions for different competition law violations. Examples of significantly higher fines imposed on Google include those imposed by the European Union, and the competition authorities of Korea and India.

Conclusion

KPPU’s decision against Google represents a significant milestone in Indonesia’s competition law enforcement, with the largest fine imposed in the agency’s history. The ruling underscores Google’s dominant market position and its restrictive policies that have impacted application developers and competition in the digital application distribution market. Even though Google filed an appeal on 7 February 2025, this Case aligns with global efforts to regulate the company’s anti-competitive market behaviour. We will continue to monitor any further developments in the Case and provide updates as they may arise.