It has been submitted that Google has not discriminated between different DFS / Rummy apps on Play as part of the RMG Pilot. Winzo itself admits that their DFS and Rummy app is available on Play as part of the RMG Pilot. Winzo cannot seek to coerce Google into accommodating Winzo’s commercial preferences, especially when Google is fairly and uniformly applying the objective criteria it formulated for the RMG Pilot.
FinTech BizNews Service
Mumbai, 29 November, 2024: The Competition Commission of India (CCI) has ordered its investigation arm on Thursday to look into a complaint filed against Google by gaming company WinZo.
The CCI’s order under Section 26(1) of the Competition Act, 2002, contains the following Conclusion:
On a holistic consideration of the facts and circumstances of the present case, the Commission is of the prima facie view that Google appears to be in violation of Sections 4(2)(a)(i), 4(2)(b), and 4(2)(c) of the Act, which warrants detailed investigation. Accordingly, the Commission directs the Director General (‘DG’) to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act limited to the issues identified in this order. The Commission also directs the DG to complete the investigation and submit a consolidated investigation report within a period of 60 days from the date of receipt of this order.
Before parting with the order, the Commission notes that Google has filed its submissions in two versions viz. confidential as well as non-confidential. It has also filed application seeking confidentiality over certain documents/ information filed by it under Section 57 of the Act read with Regulation 35 of the Competition Commission of India (General) Regulations, 2009 or Regulation 36 of the Competition Commission of India (General) Regulations, 2024 (General Regulations 2024), as the case may be. The confidential version was kept separately during the pendency of the proceedings. It is made clear that nothing used in this order shall be deemed to be confidential or deemed to have been granted confidentiality, as the same have been used for the purposes of the Act, in terms of the provisions contained in Section 57 thereof.
It is also made clear that nothing stated in this order shall tantamount to a final expression of opinion on the merits of the case and the DG shall conduct the investigation without being swayed in any manner whatsoever by the observations made herein.
The Secretary is directed to send a copy of this order along with the Information and other material available on record to the office of DG forthwith, through speed post/email. The Secretary is directed to serve a copy of this order to the counsel(s) of the parties also, through speed post/e-mail.
The CCI has mentioned the following details, among others, in its order under Section 26(1) of the Competition Act, 2002:
The Information in this matter was filed by Winzo Games Private Limited (Informant) under Section 19(1)(a) of the Competition Act, 2002 (Act) against Google LLC, Alphabet Inc., Google India Private Limited and Google India Digital Services Private Limited (collectively, Google) alleging contravention of provisions of Section 4 of the Act.
It has been submitted that Google operates ‘Google Play’ wherein third-party app developers make available their apps to the users. The Informant avers that in order to host apps on Google Play, the app developers must agree with Google’s one-sided Developer Distribution Agreement (DDA) and Developer Program Policies (DPP) which contain unreasonable and unjust conditions. The Informant has submitted that Play Store restricts hosting of gaming applications that offer Real Money Games (RMGs) in India. Due to Google’s abovementioned unreasonable and restrictive policy all apps offering real money games of skill are only available for download from their website (a process called sideloading). Thus, the Informant’s app can only be downloaded using its website. It has been submitted that when users access the website for downloading the Informant’s app on Android devices, a disclaimer/warning is displayed. As per the Informant, the aforesaid warning is peculiar to the Google operated Android OS and lack any merit or reason and is completely illegal. The same is claimed to be not only misleading which tarnishes Informant’s market reputation but also is an active misrepresentation resulting in loss of business.
In addition, it has also been alleged that when a user makes a payment to the Informant to play skill based games and attempts to use ‘Google Pay’ to make such payment, Google displays another baseless warning in the following words:
‘This person might be flagged as risky. Check again or cancel this payment’.
Further, users are also warned about payments if the amount exceeds certain thresholds fixed by Google, without any justification, in the following words:
‘This is an unusually high amount. Check again before sending money’.
As per the informant, such payment warnings are arbitrary as Google has not set any criteria for displaying such warnings. It has been further stated that National Payments Corporation of India (NPCI) has never required/directed payment service providers to display such warnings for payments to real money skill-based game merchants.
The Informant has further averred that on 07.09.2022, Google updated its policies under which it commenced a Pilot Program to test hosting of only two types of RMGs on its Play Store i.e., Daily Fantasy Sports (DFS) and Rummy in India for a period of 1 year i.e., from 28.09.2022 to 28.09.2023. As per the Informant, allowing users to seamlessly download DFS and Rummy Apps from Play Store while showing warnings (during sideloading) with respect to other skill-based gaming apps will eliminate the level playing field and create a false perception of legitimation of DFS and Rummy over all other games of skill. The Informant has alleged that the decision to limit the Program’s scope to only DFS and Rummy apps and disallow all other RMGs, is devoid of any reason and is thus, discriminatory and arbitrary constituting abuse of its dominant position by Google.
Another allegation of the Informant pertains to the updated advertisement policy of Google. It has been submitted that Google has started enforcing the Pilot Program through Google Ads which is an online advertising platform owned and offered by Google allowing third parties/app developers to advertise on Google, YouTube and the larger Android OS Applications ecosystem. The Informant has submitted that from 21.11.2022, Google has restricted its advertisements policy (modified Ad policy) by only allowing DFS and Rummy app advertisers to host advertisements using Google Ads. As per the Informant, given the unprecedented potential to increase business by accessing users through Google Ads, Google’s modified Ad policy which restricts Informant’s advertisements from being hosted as part of Google’s Ad program, is abuse of its dominant position.
The Commission is of the prima facie view that basis of delineation of relevant market as well as determination of Google to be in a position of dominance in these markets, continues to be valid and no information has been brought on record which would warrant taking a different approach in the present matter. Accordingly, for the purpose of the present matter also, the Commission is of the prima facie view that the relevant markets are (a) Market for licensable OS for smart mobile devices in India; (b) Market for app store for Android smart mobile OS in India; and (c) Market for online search advertising services in India. Google is also found to be dominant in these markets.
Listing of Real Money Gaming (RMG) Apps on the Play Store
The Informant has alleged that Google, by way of its arbitrary one-sided Developer Distribution Agreement and Developer Program Policies (Policies) does not permit listing of third-party gaming apps that offered users the facility to place real money for stake in ‘games of skill’ on Google Play Store. As per the Informant, these games i.e., RMGs have been declared to be legal by the Hon’ble Supreme Court and various High Courts of the country and hosting these games on app stores is a general market practice which is not followed by Google without any justification. The Informant has averred that this conduct of Google (a) constitutes an act of denial of market access under Section 4(2)(c) of the Act; and (b) amounts to unfair/discriminatory condition in sale of real money game service resulting in contravention of Section 4(2)(a)(i) of the Act.
Submissions of Google in this regard are summarised below:
The Indian Constitution empowers both central and state legislatures to regulate “betting and gambling” activities which have led to a fragmented regulatory framework across India. While certain States have subscribed to the (central) Public Gambling Act, 1867 (Gambling Act), several others have enacted their own legislation to regulate betting and gambling. The Gambling Act does not apply to “Games of Skill”, which the Hon’ble Supreme Court of India has defined as those games in which “success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player” differentiated from “Games of Chance”, in which “the element of chance predominates over the element of skill.” Therefore, games that require a preponderance of skill over chance are arguably not prohibited by the Gambling Act. That said, certain States - such as Telangana, Kerala, and Andhra Pradesh - ban all types of games. Google has further averred that there is no objective definition of a 'Games of Skill' in India and the determination of same is stated to be a question of fact and is dependent on the specific format, features, rules of the game, i.e., it requires a case-by-case determination.
On 06.04.2023, the MEITY amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 under the Information Technology Act, 2000 (IT Act) (Amended IT Rules). These Amended IT Rules seeks to regulate all online games and provides specific requirements and compliance obligations for Online Gaming Intermediaries that offer online RMGs. Google has stated that if it offers online RMGs on the Play Store, it may be viewed as an Online Gaming Intermediary. Further, MEITY proposes to designate Self-Regulatory Bodies (SRBs) that will verify and certify specific online RMGs as permissible RMGs in India. Once the Amended IT Rules are implemented (i.e., SRBs are designated), an Online Gaming Intermediary can only offer online RMGs that have been verified and certified as permissible by an SRB. However, MEITY is yet to designate any SRB.
There are significant differences in the way different States in India regulate online gaming (including RMGs), and rules and regulations governing online gaming are still evolving across various States. Google has also averred that there is potential for conflict between Central regulations on online gaming i.e., Amended IT Rules and State-level gambling legislations. Given this fragmented regulatory framework, allowing all RMG games to be distributed on Play Store would expose Google to legal risk under the gaming laws of some States and the Amended IT Rules. It may also pose regulatory risks for users and developers alike.
The legal and regulatory uncertainty in offering RMGs in India has influenced Google’s decision not to include India in the list of countries where RMGs are allowed. Accordingly, Google decided to launch a short-term pilot program from 28.09.2022 to 28.09.2023, to understand the RMG landscape in India and take a measured approach to collate learnings with respect to its RMG policies, while ensuring a safe experience for its users.
RMG Pilot
The Informant has averred that Google updated its DPP and DDA Policy (Updated Policy) under which it commenced a Pilot Program to test the placement of only two types of RMGs in Google’s Play Store in India i.e., Daily Fantasy Sports (DFS) and Rummy. The said program was stated to be active for an initial period from 28.09.2022 to 28.09.2023.
In relation to the RMG Pilot, the Informant has alleged that the preference given to DFS and Rummy is arbitrary and prejudicial to app developers who develop other types of RMGs as it renders them on an unequal footing in the market. The Informant also claims that on account of not being listed on Play Store owing to Google’s discriminatory Pilot Program, Informant is incurring huge expenditure in terms of cost of acquisition of users Case No. 42 of 2022 Page 10 of 24 per install. The Informant has alleged that said conduct of Google is discriminatory, imposes an unfair condition, limits, and restricts provisioning of other RMG services, particularly those in the casual gaming sector and amounts to denial of market access for non-DFS and Rummy app developers. Accordingly, Google has been alleged to have violated Section 4(2)(a)(i), Section 4(2)(b)(i) and Section 4(2)(c) of the Act.
In relation to RMG Pilot, Google has submitted that the Amended IT Rules were introduced on 06.04.2023 i.e., during the RMG Pilot. Considering the feedback received from its developer partners and the imminent operationalisation of SRBs, Google announced a grace period from September 2023 till 15.01.2024, as a stop-gap arrangement with the intention of enabling distribution of all SRB verified RMGs from the said date. Further, vide its response dated 02.02.2024, referring to certain news reports, Google intimated that the operationalisation of SRBs may be delayed. However, Google continued to collate its learnings from the RMG Pilot and gathered positive feedback from users and developers. Based on these learnings and considering Google’s overall objective to create a safe and secure RMG ecosystem, Google announced its plans to update its Play policy to support more RMG apps and required time until 30.06.2024, to implement the policy update and thus, extended the grace period until then.
Google vide its response dated 21.06.2024 further submitted that its teams have been working on implementing the policy update to expand support on Play to new categories of RMG apps in markets without an existing licensing framework. However, expanding to a new category of apps on Play is a complex process with several challenges. It has been further averred that Google also considered closing the RMG Pilot and introducing the policy update only after Google receives greater clarity on the regulatory landscape in India. However, closing the RMG Pilot would require Google to offboard those apps which are currently distributed as part of the RMG Pilot, which would risk significant developer and user disruption. Therefore, Google extended the grace period for the RMG Pilot while continuing to develop a mechanism to open the Play Store to other RMGs.
It has also been submitted that Google has not discriminated between different DFS / Rummy apps on Play as part of the RMG Pilot. Winzo itself admits that their DFS and Rummy app is available on Play as part of the RMG Pilot. Winzo cannot seek to coerce Google into accommodating Winzo’s commercial preferences, especially when Google is fairly and uniformly applying the objective criteria it formulated for the RMG Pilot.
On the other hand, the Informant has averred that the conduct of Google has resulted in appreciable adverse effect on competition in the RMG space and constitutes denial of market access. The Pilot Project has benefited DFS and Rummy apps in gaining more user base. Further, Google has failed to produce any study, survey or report to show that Rummy and DFS are the most widely used or popular RMG games.
Based on the reply dated 21.06.2024 submitted by Google, it is noted that the said Pilot has been extended indefinitely beyond 30.06.2024 as no date has been set for its termination. Therefore, the second issue for consideration is whether such long duration Pilot has resulted or is likely to result in any distortion in the competitive process in the RMG market.
Google has submitted that it has selected DFS and Rummy for the pilot primarily based on their popularity, with the aim of maximising learnings from the RMG Pilot. It has been further averred that the Hon’ble Supreme Court of India (as well as other courts) have recognised DFS and Rummy as predominantly games of skill. The higher degree of legal certainty attached to DFS and Rummy is stated to provide Google with additional comfort from a risk assessment perspective.
The Informant has also stated that Google has merely made a vague, unsubstantiated and arbitrary assertion that “DFS and Rummy are by far the largest and most popular categories of RMGs” but have failed to substantiate it with any documentary or statistical evidence whereas, the Information demonstrates that DFS and Rummy, combined, have less than 20% penetration / user base and outreach, compared to other categories of skill based games. Based on various averments, the Informant has alleged that by limiting the available apps to DFS and Rummy for the Pilot Program without any justification, Google has engaged in abuse of their dominant market position, thereby denying market access to the Informant.
the Commission notes that Google Play Store is two-sided market in which Google has been able to attract a large number of Android users on one side due to presence of large number of apps and on the other hand a large number of app developers due to the potential to reach a large audience. Google’s Play Store is the app store with the largest quantity of apps and is pre-installed on 100% of Android devices. Play. The Commission has already examined the ‘must have’ nature of Play Store in Case No. 42 of 2022 Page 13 of 24 Google Android Case as well as Google Play Case. Thus, for app developers, being listed on the Google Play Store is practically a necessity to reach a large audience. Exclusion from the Play Store may result in significant disadvantage in accessing end users, thereby prima facie amounting to a denial of market access. This exclusionary effect not only impairs the ability of rival app developers to compete but may also force some developers to exit the market entirely.
The Commission observes that direct access to end-users via the dominant Play Store provides a significant competitive edge to DFS and Rummy apps, potentially disadvantaging other real-money gaming (RMG) applications. This selective onboarding prima facie distorts the competitive landscape to the disadvantage of apps not covered in the Pilot. Further, Google’s justification for selecting these app categories appears ambiguous and non-transparent.
While temporary programs can introduce innovations or test new features, extending them indefinitely can exacerbate existing market distortions. The long duration of Google's pilot program, risks perpetuating the advantages conferred upon selected participants, such as DFS and Rummy apps. This temporal extension amplifies the anti-competitive effects by ensuring these apps continue to enjoy preferential access and visibility, which other competitors are denied. The competitive edge granted to select players (DFS and Rummy), if unchecked, can entrench their position in the market and create barriers for new entrants or smaller or other competitors in the RMG market.
The Commission also notes from the submissions made by the Informant that the Informant’s closest competitor, i.e., Dream 11 which holds 90% of the DFS market, had gained additional user traction of about 1.7 crores within two months from the launch of the Pilot Program, whereas the Informant appears to have been deprived of similar opportunities owing to the OPs pilot program. Dream11 captured 150 million users over 16 years, but their growth accelerated significantly once they joined the Google Play Store, adding another 55 million users in just one year. Furthermore, within a month of being included in the Pilot Program, Dream11 achieved ranking #1 among top chart apps in India and #8 globally by the end of 2023. Thus, based on this data, it appears that the listing of DFS and Rummy apps on Play Store, pursuant to the RMG Pilot, has significantly impacted other RMG apps. 38. The Commission is of the view that various submissions made by both the Informant and Google, including Google's justification for its selection criteria and the impact of the pilot's duration, warrant a comprehensive and detailed investigation. It is further noted that a pilot program, should ideally be implemented in a controlled and phased manner viz. setting clear limitations on both the geographic scope of the program and the number of downloads permitted during the pilot phase. Such an approach ensures that any potential risks or regulatory concerns can be effectively monitored and addressed in a manageable setting. In the present case, the pilot program was rolled out on a pan-India basis without any apparent restrictions on the number of downloads by users. These aspects also need to be evaluated during investigation. 39. In view of the foregoing, the Commission is of the view that given the presence of network effects in an app store market, prolonged duration of such pan-India Pilot consisting of only selective RMG apps prima facie appears to deny market access to non-DFS and non-Rummy RMG applications. This denial significantly disadvantages other players in the RMG sector by limiting their ability to compete effectively. The Commission is of the prima facie view that such conduct is in violation of Section 4(2)(c) of the Act. Further, Google's conduct in structuring the RMG Pilot also prima facie appears to impose unfair conditions on non-DFS and non-Rummy RMG app Case No. 42 of 2022 Page 15 of 24 developers. By granting preferential treatment to select app categories, Google effectively creates a two-tier market where some developers are accorded superior access and visibility while others are discriminated against and thus, left with a competitive disadvantage. Thus, the Commission is of the prima facie view that such conduct is also in violation of Section 4(2)(a)(i) of the Act. Such practices also prima facie appear to limit or restrict provision of other RMG apps as well as their technical and scientific development, in violation of Section 4(2)(b) of the Act.
The Commission has perused the information available on record and notes that with the technological advancements and rapid digitalization of the economy, online advertisements have become an indispensable tool for advertisers to extend their reach and connect with a broader audience. In the current digital ecosystem, where Google holds a dominant market share of approximately 95% in the search engine market, its search advertisement platform serves as a critical channel for apps aiming to maximize visibility and drive user acquisition. The inability to access Google’s search advertising platform can undermine an app's ability to compete effectively, potentially diminishing its market visibility and hindering its ability to expand its user base.
The Commission is of the prima facie view that the restrictions imposed by Google on advertising through its platform, limit or restrict the provision of RMG apps other than DFS and Rummy as well as their technical and scientific development, in violation of Section 4(2)(b) of the Act. Furthermore, by blocking access to an important advertising channel, Google appears to deny market visibility of such RMG apps, thereby prima facie resulting in denial of market access for such RMG apps in violation of Section 4(2)(c) of the Act. This prima facie also appears to be discriminatory conduct in violation of Section 4(2)(a)(i) of the Act.
The keyword bidding issue raised by the Informant has already been adjudicated by the Commission and the same does not warrant any fresh consideration. Further, the Informant has also made certain arguments in this regard which relate to adjudication under trademark law. However, the Commission is not the appropriate authority to adjudicate on such claims by the Informant.
The Commission has perused the submissions of the parties and notes that the payment warnings are purportedly presented by Google as part of its compliance with regulatory guidelines issued by authorities such as RBI and NPCI. However, given the averments of the Informant that these payment warnings are not displayed in Rummy and DFS applications listed on the Play Store, the Commission deems it appropriate to ascertain whether these payment warnings have any connection to selection of these categories of RMG apps for Google’s RMG Pilot. Further, it also needs to be investigated as to whether these warnings adversely affect the competitive landscape as elaborated supra. Therefore, the DG may examine the allegations of the Informant in this regard also, during its investigation.
