Last Updated:
Competition Commission of India orders an investigation against Google following a complaint by online gaming company Winzo
Google is accused of engaging in anti-competitive practices
The Competition Commission of India (CCI) has initiated an investigation into Google following allegations by online gaming company Winzo. The gaming platform accused the tech giant of engaging in anti-competitive practices and exploiting its dominant market position to disadvantage and discriminate against gaming companies.
The CCI issued its order on Thursday, responding to Winzo’s complaints. The investigation will focus on whether Google’s policies and actions violate competition laws by creating unfair hurdles for gaming platforms operating in India.
While passing the order, CCI said “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”.
In its 24-page order, the regulator noted that the selective inclusion of DFS and Rummy apps gives them an undue competitive advantage.
“Direct access to end-users via the dominant Play Store provides a significant edge to DFS and Rummy apps, potentially disadvantaging other RMG applications,” the Commission said in its order.
CCI also flagged concerns regarding Google’s sideloading warnings displayed when users attempt to download RMG apps.
The investigation will be done within 60 days and will focus on allegations raised by Winzo, including:
- Denial of Market Access
- Discriminatory Treatment
- Advertising Restrictions
- Misleading Warnings
Winzo’s claims highlight concerns over Google’s business practices, particularly its Play Store policies, which have faced similar scrutiny in other sectors. This probe adds to the growing list of regulatory challenges Google is encountering in India, as authorities intensify their oversight of the digital economy.
Winzo’s Statement
Saumya Singh Rathore, Co-founder of 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.”
According to Rathore, the 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.
“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 spending, 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,” Rathore pointed out.
Rathore added that 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 thrive on fair market conditions, which is what we are fighting for as a business.”
The outcome of the investigation could have significant implications for the tech and gaming industries in India, especially as the online gaming market continues its rapid growth. Google’s response to this latest development is eagerly awaited as the probe gets underway.
(This is a developing story)