CCI Investigates Google for Anti-Competitive Practices in Real Money Gaming

What’s in today’s article?

• Why in News?
• Online Gaming in India
• CCI Launches Probe into Google 

Why in News?

The Competition Commission of India (CCI) has initiated an investigation into Google following a complaint by real money gaming (RMG) platform Winzo. 

The complaint alleges that Google’s pilot project, which selectively allowed fantasy sports apps like Dream11 and rummy games on its Play Store, discriminates against other RMG companies and distorts market competition.

Online Gaming in India

• Types
  • E-sports
    • Competitive video gaming where players or teams compete in popular games at local, national, and international levels.
    • Examples: PUBG Mobile, Call of Duty, Dota 2, League of Legends, Free Fire etc.
  • Fantasy Sports
    • Games where users create teams of real-life athletes and earn points based on their performance in actual games.
    • Examples: Dream11, MyTeam11, MPL Fantasy.
  • Games of Skill
    • Games where the outcome is primarily determined by the player’s skills and decision-making rather than luck.
    • Examples: Chess, Rummy, Poker, Carrom.
  • Games of Chance
    • Games where the outcome is determined largely by luck, with minimal or no skill involved.
    • Examples: Roulette, Slot Machines, Lottery, Dice games.
• Online gaming regulations in India
  • Game of Skill vs. Chance
    • The central principle is that only "games of skill" are permitted, while games of chance are generally considered gambling and prohibited. 
    • However, there is no clear definition to distinguish between game of skill and game of chance.
  • State Level Regulations (Online gaming - a state subject)
    • While the central government sets the basic framework, individual states can enact their own laws regarding online gaming based on their interpretation of games of skill. 
  • Self-Regulatory Bodies (SRBs)
    • The MeitY has established a system where online gaming platforms can register with SRBs that verify if their games are compliant with the rules, and these bodies also handle user complaints. 
    • Online games, which do not involve real money, do not require any regulatory nod.
  • KYC and User Verification
    • Online gaming platforms are required to implement Know Your Customer (KYC) procedures to verify user identities.
  • Nodal Ministry
    • the Ministry of Electronics and Information Technology (MeitY) is the nodal ministry for online gaming in India.
    • For e-sports, the Department of Sports, under the Ministry of Youth Affairs and Sports (MYAS), has been notified as the nodal agency.
• Challenges Faced by the Online Gaming Market in India
  • There is currently no regulatory framework to govern various aspects of online gaming companies.
  • No mechanism exists for individuals to differentiate between legitimate gaming platforms and illegal gambling/betting sites. 
  • Money laundering and national security concerns are exacerbated by the growth of illegal offshore gambling and betting markets.

CCI Launches Probe into Google 

• About the news
  • CCI has launched a probe into Google for alleged abuse of its dominant position in the real money gaming (RMG) ecosystem.
  • The CCI noted that prolonged pilot programs and non-transparent policy enforcement by Google raise concerns about anti-competitive practices.
  • It has tasked its director general to carry out a “thorough probe” into the matter within the next two months.
• Allegations on Google
  • Google’s 2022 Policy Update and Pilot Programme
    • Google introduced a one-year pilot programme in 2022, allowing only Daily Fantasy Sports (DFS) and rummy apps on its Play Store in India.
    • Winzo criticized the exclusion of other real money gaming (RMG) apps, calling it “discriminatory and arbitrary.”
    • Winzo alleged that Dream11, a competitor included in the pilot, gained 1.7 crore new users within two months of the programme’s launch.
  • Advertising Policy Restrictions
    • Google restricted its advertising policy in 2022, allowing only DFS and rummy apps to host advertisements.
    • Winzo argued that this restriction constituted an abuse of Google’s dominant position, as access to Google’s advertising platform offered significant business growth potential.
  • Payment Warning Messages
    • Winzo alleged that Google discouraged users from engaging with its app by showing warning messages during payments made via Google Pay.
    • Messages included warnings like “This person might be flagged as risky” and “This is an unusually high amount,” potentially deterring users.
• Key Allegations
  • Winzo claimed Google’s actions created unfair competition, provided undue advantages to select competitors, and hindered the growth of other RMG platforms.
  • Google’s defence
• Lack of Objective Definition for Games of Skill
  • Google argued before the CCI that there is no clear or objective definition of "games of skill" in India.
  • Determining whether a game qualifies as a game of skill requires case-by-case evaluation based on specific features, format, and rules.
• Pending Online Gaming Rules
  • Google highlighted the uncertainty surrounding the online gaming rules notified by the IT Ministry.
  • These rules mandate the creation of self-regulatory bodies to decide permissible games on platforms like the Play Store, but their implementation is still pending.
• Fragmented Gaming Legislations in India
  • Google raised concerns about India’s fragmented gaming laws, where different state governments have varying regulations.
  • The lack of uniformity complicates compliance for online gaming platforms.

Q.1. Why is the CCI investigating Google?

The CCI is investigating Google for allegedly abusing its dominant position by favoring specific RMG apps on the Play Store, creating unfair competition and market distortion.

Q.2. What are Winzo’s allegations against Google?

Winzo alleges that Google's 2022 pilot program and restrictive advertising policies unfairly benefited DFS and rummy apps, hindering other platforms and deterring users with warning messages during payments.

News: The implications of CCI’s investigation into Google over real money gaming | Business Standard | Economic Times