In a potential blow to Google’s dominance in the app market, the Competition Commission of India (CCI) has launched an investigation into the tech giant. Online gaming company Winzo has accused Google of abusing its power by restricting real-money gaming apps on the Play Store.
Winzo claims that Google’s policies force developers to distribute their apps through sideloading, a less secure method. This, according to Winzo, not only limits consumer choice but also poses security risks. The gaming company claimed that due to this unreasonable and restrictive policy of Google, all apps offering real money games of skill are only available for download from their website (a process called sideloading).
What CCI’s order against Google says
In an order, the regulator has asked its director general to wrap up the investigation and submit a consolidated report within 60 days. “On a holistic consideration of the facts and circumstances of the present case, the Commission is of the prima facie view that Google appears to be in violation of Sections 4(2)(a)(i), 4(2)(b), and 4(2)(c) of the (Competition) Act, as detailed in this order, which warrants detailed investigation,” the CCI said in the order.
“Thus, the informant’s (Winzo’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,” the order said, citing Winzo’s claim.
“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,” the order said.
What Winzo said on CCI order
In a statement, Saumya Singh Rathore, Co-founder 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. 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 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.”