a year ago

Indonesia launches probe on Google Play Store payment services

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Indonesia's anti-trust agency (KPPU) said on Thursday 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, reports Reuters.

"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 in a response on Friday said earlier this month it had rolled out the next phase of its user choice billing pilot in Indonesia, allowing developers to offer users an alternative billing system alongside Google Play’s billing system.

"We look forward to working with the KPPU to demonstrate how Google Play supports developers," a Google spokesperson said in an email response.

Google has been fined more than 8 billion euros ($7.99 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.

($1 = 1.0007 euros)

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