WinZO Games Private Limited, India’s leading skill-based gaming platform, welcomes the Competition Commission of India (CCI) order directing a detailed investigation into Google’s alleged anti-competitive practices.
The investigation will address the unfair restrictions imposed by Google through its Play Store policies, advertising practices, and payment mechanisms, which have severely impacted innovation and competition in India’s gaming ecosystem.
The CCI, in its order under Section 26(1) of the Competition Act, 2002, has found prima facie evidence of violations under Sections 4(2)(a)(i), 4(2)(b), and 4(2)(c) of the Act.
These sections relate to the abuse of dominant market position, denial of market access, and imposition of unfair or discriminatory conditions. The CCI is also of the prima facie view that Google is found to be dominant in (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.
The Commission has perused the submissions of the parties and notes that while the Games of Skill have been held as valid business activity by the Supreme Court of India, the distinction of the same with ‘Game of Chance’ appears to require a case-to-case examination.
Ministry of Electronics and Information Technology has also proposed, through Amended IT Rules, to regulate online RMGs by way of an SRB framework. This regulatory framework, once established, is expected to address the ambiguities.
Google’s RMG Pilot Program, which selectively allowed only DFS and Rummy apps on the Play Store, has been found to distort competition to the disadvantage of apps not covered in the Pilot.
Further, Google’s justification for selecting these app categories appears ambiguous and non-transparent. The program’s indefinite extension amplifies these distortions, granting preferential access to a few while excluding others.
The CCI has observed that Google’s Pilot Program provided Dream11, which already dominates 90% of the DFS market, with an additional advantage, enabling it to gain 1.7 crore additional users within just two months of its inclusion, whereas WinZO and other RMG Apps appears to have been deprived of similar opportunities owing to the Google’s pilot program.
The CCI has further observed that 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. These aspects also need to be evaluated during investigation.
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.
Google Ads allows advertisements for DFS and Rummy apps but restricts ads for other skill-based RMG apps, including WinZO.
CCI notes that 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.
Also, mentioned below are additional inputs from Saumya Singh Rathore, Co-founder, WinZO.
“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.
The Google Play store policy to include only Fantasy & Rummy, and the Ads Policy to allow only Fantasy & Rummy businesses to advertise on the internet, effectively distorts the market as the pilot was live for only two selected categories, driven by monopolistic practices.
For example, 95% of the fantasy market is owned by a single player, and 90% 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%. 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.
User acquisition and marketing costs constitute more than 60-70% 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.”
