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The Competition Commission of India directs the Director General to investigate Google for alleged anti-competitive practices regarding real money gaming applications and search advertising policies. The inquiry covers Google's pilot program limiting Play Store hosting and advertisements to Daily Fantasy Sports and Rummy, along with related payment warnings. Google must submit a consolidated investigation report within sixty days from receipt of the order. The investigation remains limited to the identified issues and does not apply to side-loading or keyword bidding disputes.
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COMPETITION COMMISSION OF INDIA Case No. 42 of 2022
In Re:
| Winzo Games Private Limited | Informant |
|---|
And
| Google LLC | Opposite Party No. 1 |
|---|---|
| Alphabet Inc. | Opposite Party No. 2 |
| Google India Private Limited | Opposite Party No. 3 |
| Google India Digital Services Private Limited | Opposite Party No. 4 |
CORAM:
Ms. Ravneet Kaur Chairperson
Mr. Anil Agrawal Member
Ms. Sweta Kakkad Member
Mr. Deepak Anurag Member
Present For Winzo Games Private Limited : Mr. Abhisek Malhotra, Ms. Srishti Gupta, Ms. Atmaja Tripathi, Ms. Anukriti Trivedi and Ms. Nishtha Chaturvedi, Advocates
For Google (Opposite Parties) : Mr. Sajan Poovaya, Sr. Advocate with Mr. Karan Singh Chandhiok, Mr. Avinash Amarnath, Mr. Rahul Rai, Ms. Shivanghi Sukumar, Ms. Raksha Agarwal, Mr. Palash Maheshwari, Ms. Tarun Donadi, Mr. Uday Bali, and Ms. Aditi Gopalakrishnan and Ms. Arunima Chatterjee, Representatives of Google
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.
The Informant is stated to be a digital gaming and technology company which operates an online digital gaming platform under its trademark and brand name ‘WinZo’. 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’.
‘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.
For the purpose of the present matter, the Informant has delineated two relevant markets i.e., market for licensable Operating System for smart mobile devices in India, and market for application stores available on devices with licensable OS in India. Further, the Informant has alleged that Google is dominant in both of these markets.
Based on above, the Informant has alleged that Google has violated Sections 4(2)(a)(i), 4(2)(b)(i) and 4(2)(c) of the Act and thus, inter alia prayed the Commission to initiate an inquiry against Google. The Informant has also sought Interim Relief under Section 33 of the Act against Google.
Consideration by the Commission
The Commission considered the matter and decided to seek response of Google to the Information as well as the application filed by the Informant under Section 33 of the Act seeking interim relief. In addition, Google was directed to submit its response to certain queries of the Commission. The Informant was also allowed to file its rejoinder, if any, thereafter. These responses were duly filed by the parties. Subsequently, Google and the Informant made further submissions during the course of proceedings.
The Commission has also taken inputs from the Ministry of Electronics and Information Technology (MEITY) in relation to permissible RMG applications for listing on app stores in India. MEITY vide its letter dated 23.04.2024 provided its reply.
The Commission perused and examined the information available on record, in its meeting held on 24.07.2024 and in terms of Regulation 17 of the Competition Commission of India (General) Regulations, 2009, decided to hold a preliminary conference with the Informant as well as the Opposite Parties on 11.09.2024 at 11:00 AM. Accordingly, the Commission heard the learned counsel/ senior counsel appearing on behalf of the parties on 11.09.2024. As prayed, the parties were also allowed to file brief synopsis of their oral arguments, in 10 (ten) days, if so desired. The Commission also decided to pass an appropriate order in due course. The post hearing submissions have since been received and taken on record.
Analysis of the Commission
In the present matter, the Informant has made various allegations against Google inter alia in relation to its app store, payment and advertisement policies. The Informant has alleged that these policies of Google violate various provisions of Section 4 of the Act. The first step for analysing any alleged abusive conduct under Section 4 is to identify the relevant market(s) and assess dominance of the opposite party therein. This is followed by examining the alleged conduct for violation of any provision of Section 4 of the Act.
As already stated, the Informant has identified two relevant markets for the purpose of examination of the alleged conduct of Google, i.e., market for licensable Operating System (OS) for smart mobile devices in India, and market for application stores available on devices with licensable OS in India. The Commission had the occasion to examine the relevant markets related to licensable OS for smart mobile devices and app stores along with Google’s presence therein, in Case No. 39 of 2018 i.e., Google Android Case (Order dated 20.10.2022 issued under Section 27 of the Act) as well as in Case Nos. 07 of 2020, 14 of 2021 and 35 of 2021 i.e., Google Play Case (Order dated 25.10.2022 issued under Section 27 of the Act). In these cases, the Commission delineated market for licensable OS for smart mobile devices in India and market for app store for Android smart mobile OS in India as relevant markets. The Commission also found Google to be dominant in both these markets.
In the present matter, the Informant has also made allegations related to online search advertisement policies of Google and accordingly, one more relevant market needs to be defined in the present matter in relation to search advertising services of Google. The Commission has considered this market in Case Nos. 07 & 30 of 2012 (In Matrimony.com Limited Vs. Google LLC & Others) and vide its order dated 31.01.2018 delineated the market for online search advertising services in India as the concerned relevant market. The Commission also found Google to be dominant in the said market for various reasons mentioned therein.
The detailed reasoning for delineation of these markets and assessment of dominance of Google therein, is not being reproduced here for brevity. 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.
Various allegations of the Informant against Google have been categorised and examined by the Commission in succeeding paragraphs:
