CCI orders probe against Google on complaint by gaming company Winzo

In its order, the CCI found Google to be prima facie in violation of antitrust provisions of the Competition Act due to the abuse of dominant position

The Competition Commission of India (CCI) on Thursday ordered a detailed investigation into Google in connection to a complaint filed by Winzo Games for alleged unfair business practices with respect to listing of real money gaming apps on Play Store.

 

The CCI in its order found Google to be prima facie in violation of antitrust provisions of the Competition Act due to abuse of dominant position. 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.

 

"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, as detailed in this order, which warrants detailed investigation," said the order.

 

Winzo Games, the informant in the case, has alleged in its complaint that on the one hand Google does not allow its app to be listed on Play Store and on the other, it displays malware warnings when a user attempts to download its app from the website. These warnings, Winzo said, tarnish its reputation and discourage potential users from accessing its app.

 

Winzo had filed a case against Play Store in 2022, when Google changed its gaming policy. In 2022, Google started allowing daily fantasy games and rummy on Play Store, leaving out a large number of skilling gaming platforms.

 

The antitrust watchdog noted in its order that preferential treatment extended to online casual gaming platforms such as Zupee and MPL by Google alleged by the Informant, raises concerns of potential discriminatory practices or selective enforcement of Google's policies in violation of Section 4(2)(a)(i) of the Act. 

 

CCI said, “Any unfair restrictions imposed by Google on advertisers are likely to have anti-competitive repercussions, adversely affecting their ability to compete in the marketplace.”

 

Google in its response to the allegations informed CCI that its Ads Policy is clear and is enforced uniformly. “Google has no commercial interest in refusing ad revenue unnecessarily and its approach reflects both its decision to mitigate legal risk and its obligation to comply with the law,” Google said in its submission to CCI. 

 

Winzo, in its complaint also alleged that Google has failed to provide a valid justification for selectively allowing only two categories of RMG — real money games — apps and its responses for the same have been inconsistent, unsubstantiated, based on assumptions and unverified market statistics.

 

 The Play Store, being pre-installed on all Android devices, is deemed a "must-have" platform for app developers.  

 

The exclusion of non-DFS and non-Rummy RMG apps from the Play Store amounts to a denial of market access, the Commission said. 

 

“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,” CCI said.

 

The fair trade regulator while ordering a detailed investigation said that nothing in its order shall tantamount to a final expression of opinion on the merits of the case. It said, “...the DG shall conduct the investigation without being swayed in any manner whatsoever by the observations made herein.” 

 

Attempts to connect with Google to get a statement did not elicit a response till the time of going to the press.

 

In a statement after the CCI order, 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 added that 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.

 

About 95 per cent of the fantasy market is owned by a single player, and 90 per cent 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. 

 

"User acquisition and marketing costs constitute more than 60-70 per cent 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," she added.