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Jofie Yordan · · 8 min readIndonesian startups push back on Google Play’s new billing rules
Google has recently found itself facing backlash from Indonesian startups after the tech giant began requiring developers to use its own billing system to receive payments on their apps.
The startups’ main gripe? The fees involved.
To use Google’s billing system, developers will be charged a 15% fee for their app’s first US$1 million in revenue each year. Once earnings surpass that amount, Google will then collect a 30% cut.
Google headquarters in Mountain View, California / Photo credit: 123rf.com
That means a company like Ruangguru, which earned US$63 million in 2020, could have paid US$18.8 million in Google fees alone (assuming its entire revenue was derived from its Android app).
Ruangguru declined to comment for this story, but Tech in Asia understands that the edtech firm has complied with the new regulation, which took effect on June 1 this year. Other edtech startups such as Zenius and Pahamify, as well as video-streaming platforms like Vidio, Bioskop Online, and GoPlay have also followed suit.
Failure to agree to the new rule would have gotten these companies’ apps kicked out from the Google Play Store – a significant issue considering Indonesia’s vast majority of Android users.
But a source from one of the affected players tells Tech in Asia that this policy has a dire financial impact.
“The enactment of this rule has a very detrimental impact on companies,” the person says. “If you look at the trend, there are many edtech companies that eventually have to lay off employees.”
Zenius users / Photo credit: Zenius
This issue has since received attention from Indonesia’s antitrust agency, Komisi Pengawas Persaingan Usaha (KPPU), which is investigating allegations of Google’s monopolistic practices and unfair competition related to its new billing policy.
Similar inquiries are happening in India and South Korea.
In response to KPPU’s probe, Google says it will cooperate with the investigation.
Forcing a price hike
Are there workarounds?
Alternative is not a solution
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The Google Play Store fees have affected the revenue of edtech startups, streaming services, dating apps, and games, among others, claim sources.
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