India’s antitrust regulator, the Competition Commission of India (CCI), has initiated an investigation against Alphabet-owned Google for allegedly providing a significant competitive edge to daily fantasy sports (DFS) and Rummy applications while potentially hurting other real-money gaming (RMG) apps.

This comes after Winzo Games Pvt. Ltd. sought the regulator’s intervention on Google’s decision to not host its real-money gaming apps in India while the tech giant allowed fantasy sports and Rummy apps on the Play Store under a pilot programme.

The Commission notes that Winzo’s closest competitor, Dream 11, which holds 90% of the DFS market, had gained additional user traction of about 1.7 crore within two months from the launch of the pilot programme, whereas Winzo appears to have been deprived of similar opportunities.

“Dream11 captured 150 million users over 16 years, but their growth accelerated significantly once they joined the Google Play Store, adding another 55 million users in just one year. Furthermore, within a month of being included in the Pilot Program, Dream11 achieved ranking #1 among top chart apps in India and #8 globally by the end of 2023. Thus, based on this data, it appears that the listing of DFS and Rummy apps on Play Store, pursuant to the RMG Pilot, has significantly impacted other RMG apps,” the competition watchdog says.

The selection of sub-categories of the RMG apps for the pilot programme, may raise competition concerns if the same is based on a “non-objective” and “arbitrary” criterion, says the CCI. “This selective onboarding prima facie distorts the competitive landscape to the disadvantage of apps not covered in the pilot,” the regulator says, adding that Google’s justification for selecting these app categories appears “ambiguous and non-transparent”.

The Commission is of the view that various submissions made by both the Winzo and Google, including Google's justification for its selection criteria and the impact of the pilot's duration, warrant a comprehensive and detailed investigation.

It further noted that a pilot programme, should ideally be implemented in a controlled and phased manner viz. setting clear limitations on both the geographic scope of the programme and the number of downloads permitted during the pilot phase. Such an approach ensures that any potential risks or regulatory concerns can be effectively monitored and addressed in a manageable setting, the regulator says. “In the present case, the pilot programme was rolled out on a pan-India basis without any apparent restrictions on the number of downloads by users. These aspects also need to be evaluated during investigation.”

Pilot programmes offer a balanced way to introduce new practices in a controlled manner, however, their implementation in a market dominated by a player like Google demands heightened scrutiny, says the CCI. Given the Play Store's critical role in the Android ecosystem, any pilot programme initiated by Google must be carefully assessed to ensure it does not result in anti-competitive outcomes, it adds.

Google’s Play Store has the largest quantity of apps and is pre-installed on 100% of Android devices. Play. For app developers, being listed on the Google Play Store is practically a necessity to reach a large audience. Exclusion from the Play Store may result in significant disadvantage in accessing end users, thereby amounting to a denial of market access, says the CCI. “This exclusionary effect not only impairs the ability of rival app developers to compete but may also force some developers to exit the market entirely,” it explains.

The Commission says that given the presence of network effects in an app store market, prolonged duration of Google’s pan-India pilot consisting of only selective RMG apps prima facie appears to deny market access to non-DFS and non-Rummy RMG applications. This denial significantly disadvantages other players in the RMG sector by limiting their ability to compete effectively, it says.

Google in its submissions had stated that the Indian Constitution empowers both central and state legislatures to regulate “betting and gambling” activities which has led to a fragmented regulatory framework across India. While certain States have subscribed to the (central) Public Gambling Act, 1867 (Gambling Act), several others have enacted their own legislation to regulate betting and gambling. The Gambling Act does not apply to “Games of Skill”, which the Supreme Court of India has defined as those games in which “success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player” differentiated from “Games of Chance”, in which “the element of chance predominates over the element of skill.” Some states - such as Telangana, Kerala, and Andhra Pradesh - ban all types of games.