Closure of Inquiry into Google Play Store Real Money Gaming Policies

[Image omitted. See the official document.]

[Image omitted. See the official document.]

COMPETITION COMMISSION OF INDIA

Case No. 42 of 2022

$\underline{\text{In Re:}}$

Winzo Games Private Limited
Suite No. 106, First Floor, Copia Corporate Suites,
Building No.9, DDA District Centre, Jasola, New Delhi -
110025, India.
Informant

$\underline{\text{And}}$

Google LLC
1600 Amphitheatre Parkway,
Mountain View, California - 94043
United States of America
OP-1

Alphabet Inc.
1600 Amphitheatre Parkway,
Mountain View, California - 94043
United States of America
OP-2

Google India Private Limited
Unitech Signature Tower-II Tower-B,
Sector-15, Part-II Village Silokhera,
Gurgoan 122001, India
OP-3

Google India Digital Services Private Limited
Unit 207, 2nd Floor, Signature Tower-II Tower A,
Sector 15 Part II Village Silokhera,
Gurgaon, Haryana-122001
OP-4

CORAM

Ms. Ravneet Kaur
Chairperson

Ms. Sweta Kakkad
Member

Mr. Deepak Anurag
Member

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[Image omitted. See the official document.]

[Image omitted. See the official document.]

Present:

Order

1. 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.

2. The Informant was stated to be a digital gaming and technology company, which offered an online digital gaming platform under its trademark and brand name ‘WinZo’ which offers over 100 games in 5 formats to the users in more than 12 regional languages.

3. Among other things, the Informant averred that Google operates ‘Google Play’, an App Store for Android Operating System (‘OS’), wherein third-party app developers make available their apps to the users. Further, Play Store restricts hosting of gaming applications that offer Real Money Games (‘RMGs’) in India. On 07.09.2022, Google updated its policies under which it commenced a Pilot Program to test hosting of 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. The Informant 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.

4. Another allegation of the Informant pertained to the updated advertisement policy of Google. It was submitted that Google started enforcing the Pilot Program through Google

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[Image omitted. See the official document.]

[Image omitted. See the official document.]

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 submitted that from 21.11.2022, Google 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 the Informant’s advertisements from being hosted as part of Google’s Ad program, amounts to abuse of its dominant position.

5. In addition, the Informant also 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 warnings. As per the Informant, such payment warnings are arbitrary as Google has not set any criteria for displaying such warnings.

6. Based on the above, the Informant 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 also sought Interim Relief under Section 33 of the Act against Google.

7. 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 proceedings. The Commission also took 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.

8. 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 erstwhile 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

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[Image omitted. See the official document.]

[Image omitted. See the official document.]

Commission heard the learned counsel/ senior counsel appearing on behalf of the parties on 11.09.2024 and decided to pass an appropriate order in due course.

Directions to the Director General

9. The Commission, vide order dated 28.11.2024, passed under Section 26(1) of the Act, formed a prima facie view that for the purpose of the assessment of alleged abusive conduct, the relevant markets were (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. Further, Google was also prima facie found to be dominant in these markets. In addition, the Commission was of the prima facie view that Google is in violation of Sections 4(2)(a)(i), 4(2)(b), and 4(2)(c) of the Act, as detailed in the said order (‘Prima Facie Order’). Accordingly, the Commission directed the Director General (‘DG’) to cause an investigation to be made into the matter.

10. Specifically, the competition concerns identified in the Prima Facie Order are summarised as under:

• 10.1. Selective onboarding of DFS & Rummy apps in the Pilot Program 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. It was further noted that given the presence of network effects in an app store market, prolonged duration of such pan-India Pilot Program 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. Further, by granting preferential treatment to select app categories, Google effectively created a two-tier market where some developers are accorded superior access and visibility while others are left with a competitive disadvantage.
• 10.2. In relation to the Google Ad Policy, the Commission noted that given Google’s pivotal role in the digital advertising ecosystem, any arbitrary criteria for selecting sub-categories of RMG apps allowed to advertise on its platform can raise significant competition concerns. The Commission was of the prima facie view that the restrictions imposed by Google on advertising through its platform, limit or restrict the provision of