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CCI Probes Google After Online Gaming Firm Winzo Claims Unfair Practices

suimt — Thu, 28 Nov 2024 14:30:32 +0000

Last Updated:November 28, 2024, 20:00 IST

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)

News business CCI Probes Google After Online Gaming Firm Winzo Claims Unfair Practices

Consumer affairs ministry cancels e-gaming study planned for framing new rules

Aseem — Fri, 18 Oct 2024 00:00:06 +0000

New Delhi: The department of consumer affairs (DoCA) has decided to withdraw from framing guidelines for e-gaming and cancelled a planned study for protecting the growing number of online gamers, two people aware of the developmen said, after draft rules were issued by the ministry of electronics and information technology (MeitY).

Bengaluru’s National Institute of Mental Health and Neurosciences (Nimhans) was to conduct the study on “disruptive impulse control behavioural patterns of online gaming that may cause vulnerabilities,” with the plan to notify new rules after the completion of the detailed pan-India study.

The study, which was planned during the tenure of former consumer affairs secretary Rohit Kumar Singh, was set to cost the department ₹20 crore, with funds to be allocated to Nimhans.

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This comes in the backdrop of MeitY issuing draft rules for e-gaming, with the Centre of the view that sufficient reference studies on the impact of online gaming are available from other countries.

“There are enough studies and research papers available that can be utilized for preparing the guidelines. MeitY is working on it in a very positive manner, and there should not be any duplicity of work,” one of the two persons mentioned above said.

As per the plan, the findings of the research were to be used to frame guidelines for protecting consumers in online gaming. The report was also supposed to assist the industry in ensuring the optimal use of technology to minimize risks.

“Recent studies highlight e-gaming addiction, the nature of which is distinct in the case of skill-based esports and real money gaming (RMG). This requires separate policies and more insight into the matter,” said Ashish Shrivastava, co-founder and chief operating officer of Glazer Games, an esports company.

Justifying the cancellation of the study, the second person said, “It’s a well-known fact that e-gaming creates addiction, and research on youth and children has also established this fact. References can be taken from studies conducted by reputable institutions around the world, as human behaviour in relation to games in India is quite similar to that in other countries.”

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Spending ₹20 crore on such a study was not worthwhile, especially when another line ministry is already in the process of finalizing the norms, this person said.

“Gaming has today rapidly evolved and grown both in opportunities and challenges. However, concerns about gaming addiction are important but cannot rely solely on merely existing studies,” said Chandrahas Panigrahi, co-founder and chief executive officer of Lets Game Now, an esports portal.

“The e-gaming dynamics are changing, and continuous research is needed in order to be fully aware of the different age groups and gaming formats that may be affected,” Panigrahi said.

As per a report by Grant Thornton Bharat and the E-Gaming Federation (EGF), India is the second-largest gaming market in the world, following China, with 442 million gamers.

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Over the past five years, the Indian gaming sector has raised a total of $2.8 billion from both domestic and global investors, with the RMG segment being identified as one of the primary revenue drivers.

However, a recent study by Mordor Intelligence stated that India’s gaming market size is estimated at $3.49 billion in 2024, and is expected to reach $7.24 billion by 2029, growing at a compounded annual growth rate of 15.68% during the forecast period (2024-2029).