In a significant move, the Competition Commission of India (CCI) has ordered a detailed investigation against Google LLC and its affiliates for alleged abuse of dominant position in the real money gaming (RMG) ecosystem.
The decision comes in response to a complaint filed by Winzo Games Private Limited, accusing Google of discriminatory practices that disadvantage other gaming app developers.
The CCI, chaired by Ravneet Kaur, found prima facie evidence of Google violating provisions of Section 4 of the Competition Act, 2002 that prohibits abuse of dominant position. The investigation will scrutinise Google’s policies on app hosting, advertisements and payment warnings, which allegedly favour Daily Fantasy Sports (DFS) and Rummy apps while excluding other skill-based gaming platforms.
Key allegations
1. Discriminatory pilot program
Winzo alleged that Google’s 2022 pilot program on the Play Store exclusively allowed DFS and Rummy apps, sidelining other RMG apps. This resulted in a competitive advantage for selected apps, such as Dream11, which reportedly saw exponential user growth during the pilot phase.
2. Ad restrictions
The complainant accused Google of restricting advertising for non-DFS and non-Rummy apps on its Google Ads platform, allegedly depriving rivals of critical visibility.
3. Payment warnings
Google allegedly displayed arbitrary warnings for payments made via Google Pay to skill-based gaming apps, potentially discouraging users. Winzo argued that similar warnings were not shown for DFS and Rummy apps, raising concerns of bias.
4. Sideloading challenges
Developers of RMG apps not hosted on the Play Store face sideloading requirements, which Google accompanies with malware warnings. Winzo contended that these warnings deter users, creating barriers to market entry.
Google’s defense
Google justified its policies by citing regulatory uncertainties in the Indian RMG sector, fragmented State laws and risks such as fraud and money laundering. The tech giant emphasised that its pilot program was a cautious step to navigate the evolving legal landscape. It denied allegations of discrimination and maintained that its policies were applied uniformly.
CCI’s Observations
The Commission noted Google’s dominant position in critical markets, including licensable operating systems for smart devices, app stores for Android OS, and online search advertising.
It expressed the following concerns:
• Excluding certain RMG apps from the Play Store and Google Ads could lead to denial of market access.
• Prolonged pilots and preferential policies distort competition, amplifying the dominance of selected app categories like DFS and Rummy.
• Lack of transparency in policy enforcement raised red flags about Google’s conduct.
Direction for Investigation
The CCI has tasked its Director General (DG) to conduct a thorough probe within 60 days, focusing on:
• The rationale behind Google’s selective inclusion of DFS and Rummy apps.
• The anti-competitive impact of its advertising policies.
• The effect of payment warnings and sideloading barriers on competitors.
- Also read: US regulators seek to break up Google, forcing Chrome sale as part of monopoly punishment
Industry implications
This case is poised to set a precedent for regulating digital platforms in India’s burgeoning gaming industry. The investigation also aligns with global scrutiny of Big Tech firms over their market dominance and competitive practices. This latest development underscores the growing tension between global tech giants and regulators in India, with far-reaching consequences for the digital economy, economy watchers said.
WinZo’s Comment
Saumya Singh Rathore, Co-founder WinZO games, said the CCI’s order is a step toward restoring fairness in the digital ecosystem. “Monopolistic practices stifle innovation and hinder competition, which are the lifeblood of any thriving industry. This decision is a significant move to ensure equitable opportunities for all players, fostering innovation and creating a level playing field that benefits both businesses and consumers”, Rathore said.
The Google Playstore policy to include only Fantasy & Rummy, and Ads Policy to allow only Fantasy & Rummy businesses to advertise on internet, effectively distorts the market as the pilot was live for only two selected categories, driven by monopolistic practices, she added.
For example, 95 percent of the fantasy market is owned by a single player, and 90 percent of the rummy market is owned by three players.
“The policy caused the marketing and customer acquisition costs for the selected games to drop to a quarter of the previous spends, disproportionately benefiting the margins of these businesses over others. This had a far-reaching impact when the GST was hiked by 400 percent. The format included in the policy, ie Fantasy & Rummy could absorb the higher GST regime due to improved margins with this distortion, unlike many other players who did not benefit from this policy further distorting the market dynamics and ability to compete in a fair market”, Rathore said.
User acquisition and marketing costs constitute more than 60-70 percent of businesses’ expenditures. When the margins for these players increased significantly due to cheaper distribution from Google Playstore, the margins for non-DFS and rummy players did not improve proportionately. “This policy has a far-reaching impact on disrupting the market and throwing many early stage ventures out of business. Innovation and creation thrives on fair market conditions, which is what we are fighting for as a business”, Rathore said.
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