Winzo vs. Google: Investigating Abuse of Dominance in the Digital Market
INTRODUCION
Dominant position is when a company has an influence or holds a superior position in the market, and it can act independently of its competitors, suppliers or consumers. Recently, Google has been alleged to abuse its dominant position against an Online Gaming platform called Winzo Games Private Limited. In a rapidly growing economy, maintaining a fair balance of competition is crucial, because any company in a dominant position can start harming the economic stability by posing unfair and anti-competitive practices which might harm the small competitors and exploit consumers. While acknowledging that Google does have dominant positions in critical digital markets such as the Android OS, the Play Store, and online advertising generally, the CCI lists certain practices that are under investigation – prohibiting app listings, access for advertising, and payment warning that are misleading for consumers.
It has been claimed by the informant that Google has one sided Developer Distribution Agreement (DDA) and Developer Program Policies (DPP) which contains unreasonable and unjust conditions. Winzo has made its complaint on the basis of 3 grounds;
- Google Pilot Program
Google has a practice of restricting all Real Money Games (RMG) to be listed on Google Play. Instead, Google has a way different website called “Sideloading” wherein a user willing to use such apps can download using this website. But google allowed two specific apps called; Rummy and DFS as part of their pilot program to be listed on Google Play.
- Advertisement Policy
Google only allowed advertisement for these two specific RMG apps and restricted all other apps such as Winzo which has raised questions about it’s discriminatory practice.
- Unreasonable Warnings
It was claimed by the complainant that whenever users try to access the website for downloading apps such as Winzo, a disclaimer/ warning is displayed to the users. Similarly, when the users attempt to use “Google Play” to make any kind of payment, it shows another warning. All these warnings are claimed to be misleading and baseless, which harms the informant’s reputation in the market and leads to loss of business.
In order to assess the abuse of dominance, identification of relevant markets is crucial. In simple terms, the relevant market is a specific area wherein many businesses compete with each other to sell their products and services. The products herein can be substituted by the consumer in terms of characteristics, consumer preference, price, existence of specialized producers etc. In the case of Atos Worldline v Verifoneindia[1], the Competition Commission of India (CCI) concluded that a particular relevant product market should be examined from the perspectives of supply and demand, taking into account the item’s attributes, price, and anticipated use. Hence, the relevant market recognized by the CCI wherein Google was allegedly abused its dominance over was:
- Market for Online Search Advertising in India
- Market for licensable OS for smart mobile devices in India
- Market for app store for Android smart mobile OS in India.
ABUSE OF DOMINANCE
Section 4 of the Competition Act, 2002 regulates and defines “Abuse of Dominance”. Abuse of dominant position is said to be done when a company by means of anti-competitive practices exploits the consumers and other driven competitors in the market. According to Section 4(2) of the Act, dominant enterprises or groups might utilize their actions to impose unfair or oppressive conditions on others.
Such anti-competitive practices include but is not limited to;
- Limiting or Restricting goods or services.
- Denial of Market Access
- Unfair or discriminatory practices
- Forcing Irrelevant conditions
In the case of Pankaj Agarwal vs. DLF[2], the Competition Commission of India determined that the Delhi Land and Finance (DLF) agreements in a flat distribution to be unfair and biassed since they took advantage of buyers. These agreements, which were written exclusively by the DLF, granted them the authority to withhold information that is crucial to the buyer, such the number of apartments on the floor, to forfeit booking fees and drop parts, and to designate super-areas without restriction etc. Moreover, in the landmark judgement of Re Shamsher Kataria v. Seil Hond[3] it was decided that an agreement between the dominant companies and foreign suppliers of distinctive auto parts was anticompetitive since it restricted the entry of new businesses. But how did
GOOGLE’S ANTI-COMPETITIVE PRATICE
It is alleged by the informant that Google, through its one-sided DDA (Developer Distribution Agreement) and DPP (Developer Program Policies) agreements, has violated:
- Section 4(2)(a)(i): Imposing unfair conditions in the purchase or sale of goods or services.
- Section 4(2)(b)(i): Limiting or restricting the production or supply of goods or services.
- Section 4(2)(c): Denying market access to competitors in any manner.
Google’s DDA and DPP agreements have been accused of imposing restrictive conditions on app developers. Google’s restrictive policies prevent Real Money Gaming (RMG) apps other than Daily Fantasy Sports (DFS) and Rummy from being listed on the Play Store. Additional question arose whether, Game of Skill was different from Game of Chance. The Public Gambling Act, 1867 makes an exception for skill-based games, stating that they are not considered gambling and are consequently not subject to the law. While games of chance are characterized by luck and a high degree of unpredictability, games of skill are determined by the player’s talent, strategy, or insight. Usually, it is up to the courts to decide if a game is one of skill or chance. It was further argued by the informant that these RMG apps have been declared legal Hon’ble Supreme Court and various High Court. By selectively allowing only certain categories of apps through its Pilot Program, Google allegedly creates a two-tier market that denies other RMG developers a fair chance to compete. Hence, violating section 4(2)(c) of the Competition Act, 2002. Additionally, Google’s sideloading warnings deter users from downloading apps directly from developers’ websites, further limiting market access. These actions, the informant claims, result in a significant competitive disadvantage for non-DFS and non-Rummy RMG apps. Google’s one-sided DDA and DPP agreements allegedly force developers to:
- Exclusively use Google’s billing system for in-app purchases.
- Agree to terms that restrict their ability to innovate or offer competitive pricing.
Moreover, Google’s Ad Policy allows advertisements only for DFS and Rummy apps, depriving other RMG apps of visibility. The informant alleges that this selective restriction violates Section 4(2)(b)(i) and Section 4(2)(c), as it restricts market growth and denies competitors access to critical advertising channels.
CONCLUSION
CCI has ordered under Section 26(1) of the Competition Act, instructing the Director General (DG) to conduct an investigation. It is definitive that there is a lack of legislation establishing a system for recognizing skill-based games. In 2023, Real money gambling was included in the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 by the Ministry of Electronics and Information Technology. In general, these regulations made it possible for gaming enterprises to establish self-regulatory organizations that would act as a system for registering and identifying various kinds of real money games. However, these have not yet been put into effect. The claims against Google highlight the critical need for regulatory oversight in the digital sector. A balanced approach that encourages both competition and innovation is critical to the long-term viability of India’s fast changing digital economy.
-By Stuti Kuzur, Ductus Legal
[1] Atos Worldline v Verifoneindia [2012]
[2] Pankaj Agarwal v. DLF, [2015] 57 taxmann.com 291 (CCI).
[3] Re Shamsher Kataria v. Seil Honda, 2014 SCC OnLine CCI 95.
DUCTUS EDGE 