Indonesia antitrust agency launches probe of Google app payments

JAKARTA - Indonesia's anti-trust agency (KPPU) said on Thursday (Sept 15) that it is investigating potential unfair business practices by Google over the use of proprietary payment services for its software distribution platform Google Play Store.

The move follows similar investigations by antitrust regulators globally involving Alphabet Inc's Google.

"KPPU suspects that Google has conducted an abuse using its dominant position, conditional sales and discriminatory practices in digital application distribution in Indonesia," it said in a statement.

An initial investigation found that since June 1 Indonesian app developers had been required to use Google's payment system, which charges a 15 per cent to 30 per cent fee, the KPPU said.

The amount charged by Google Pay Billing is much higher than other services, which cost under 5 per cent before the requirement took effect, it said.

If apps did not comply, they risked being removed from Google Play Store, it added.

KPPU said Google controlled a 93 per cent market share in the country of 270 million people which has a fast-growing digital economy.

Google did not immediately respond to a request for comment, but in other countries where it has faced similar probes the company has argued that its service fee helps keep Android free, giving developers the tools and global platform to access billions of consumers around the world.

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Google has been fined more than 8 billion euros (S$11 billion) by the European Union in the last decade for anti-competitive practices related to its price comparison service, Android mobile operating system and advertising service.

A top European court upheld a ruling on Wednesday that it broke competition rules and fined the company a record 4.1 billion euros. 

South Korea's telecommunications regulator said in August it planned an investigation into app store operators, including Google, over suspected violations of in-app payment law.

Seoul passed legislation last year dubbed the "anti-Google" law, which bans major app store operators from forcing software developers to use their payment systems, effectively stopping them from charging commissions on in-app purchases. 

KPPU will conduct the investigation over the next 60 days and an official said if Google is found to have breached anti-monopoly laws it could be fined a maximum of 50 per cent of net profit gained during the period.