Gaming The System: Winzo’s Fight Against Google’s Dominance

- by Manreet Kaur, IInd year student at Rajiv Gnadhi National University of Law, Punjab

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Introduction

WinZO has challenged the reigning Play Store monopoly, in a match to level the playing field once and for all. Tech giants like Google dominate the digital world, and their immense power has sparked countless legal battles. The case of In Re: WinZO Games Private Limited is one such story, and it’s a fascinating example of how smaller companies are pushing back against unfair practices in the online gaming world. In the ongoing dispute, currently under investigation by the Competition Commission of India (CCI),  allegations of abuse of dominance, reputational harm, and the barriers faced by emerging businesses, have become the points of focus. The case has raised questions about fair competition, brand disparagement, and the limits of market power in India’s digital economy.

Facts of the Case

WinZO, a gaming platform where users play real-money games (RGMs), these are games where players can make their own real-time money according to their skills. WinZO contends that Google’s actions are making it hard for smaller companies to compete. They point to intimidating warnings that discourage people from downloading their app and other barriers that they argue tilt the playing field in Google’s favor. These allegations led the CCI to order an investigation into whether Google’s actions distort competition in the online gaming market and unfairly disadvantage smaller players. WinZO’s complaint hinges on three key provisions of the Competition Act, 2002, which outline what constitutes an abuse of dominance:

Section 4(2)(a)(i): Imposing unfair conditions on the purchase or sale of goods or services.

Section 4(2)(b): Limiting or restricting the production of goods, provision of services, or their market access.

Section 4(2)(c): Denying market access to competitors.

WinZO’s Allegations

WinZO alleged that Google’s warnings unfairly tarnish its reputation, discouraged users, and limit its ability to compete. The company sees these actions as potential obstacles to may keep smaller platforms from thriving, allowing Google to maintain its market dominance.

Malware Warnings: When users attempt to sideload, which is the process

through which users download software from third-party sources, the WinZO app on their Android devices, Google displays warnings that imply potential security risks or malware threats damaging the platform’s reputation and discourage potential users from downloading the app.

Payment Warnings: Users attempting to make payments for skill-based games through Google Pay are met with warnings that, create fear and uncertainty about the transactions. This affects user confidence and paints the platform in a negative light.

Discriminatory and Arbitrary Pilot Programme: In 2022, Google launched a Pilot Program allowing only Daily Fantasy Sports (DFS) and Rummy to be hosted on its Play Store in India for one year. WinZO alleges that this creates an uneven playing field by permitting unhindered downloads of DFS and Rummy apps while displaying warnings for WinZO when users attempt to sideload.

Disparagement and Libel: WinZO had also alleged that Google’s warnings amount to brand disparagement. However, this claim was dismissed by the Delhi High Court in its judgement, noting that:

No Comparative Advertising: For a claim of disparagement to succeed, there must be direct comparisons between competing products or services. In this case, Google’s warnings did not specifically compare WinZO to other apps.

Permissible Disclaimers: The court cited the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which allow platforms to issue disclaimers to protect users from potential risks.

The court may have missed the bigger picture by not addressing how these warnings create a lasting negative impression. By framing the app as risky or unreliable, users are less likely to trust and engage with the platform, harming its reputation long-term. This raises important questions about whether the law should evolve to address non-comparative forms of disparagement and libel.

Google’s Defences

Google claims the warnings are not aimed at harming competition but are in compliance with regulatory guidelines from authorities such as the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI), particularly guidelines regarding user data security, secure payment systems, and restrictions on unauthorized financial transactions. According to Google, these warnings are meant to protect users from potential risks associated with unregulated apps and payment systems, ensuring a secure digital ecosystem.

Regulatory Complications : Google argued that the regulation of betting and gambling in India is fragmented, with different states having varying laws. While the Public Gambling Act, 1867 does not apply to games of skill, some states prohibit all types of games that allow users to make money, creating a complex legal landscape. Google asserted that they must then proceed with caution and access each game before verifying it as safe for users.

New IT Rules : Following the amendment of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, Google contended that hosting online RMGs could classify it as an Online Gaming Intermediary, a platform to connect users to online games, exposing them to legal risks by allowing unverified apps on its platform. Designated Self-Regulatory Bodies (SRBs) must first permit these RGMs for Google to verify them.

Pilot Programme : Google initiated the short-term pilot program to better understand the RMG landscape in India and gather feedback without endangering user safety. This pilot is intended to help Google take a measured approach to by gathering feedback, and take cautious steps in this new industry. Further, Google raised concerns about the various risks that RGMs carry, especially the lack of safeguards to secure users’ money.

However, despite Google’s justification, the CCI found prima facie evidence of abuse of dominance, warranting a detailed investigation.

CCI’s parameters for instigating the DG investigation

Relevant Market : The first step for analysing any alleged abusive conduct under Section 4 is to identify the relevant market and assess dominance of the parties therein. For the purpose of this case, the Commission delineated the relevant markets as

(a) Market for licensable OS for smart mobile devices in India;

(b) Market for app store for Android smart mobile OS in India; and

(c) Market for online search advertising services in India.

Abuse of Dominance : Abuse of Dominance occurs when an entity exploits its market power in a way that adversely effects competition. The Commission has previously held Google to be  abusing its dominant position in the first two markets established for the case, in the Android Case and the Google Play case respectively.

Android powers over 95% of smartphones in India, giving Google significant control over app distribution and user access. Practices like issuing malware warnings and restricting payment systems can act as gatekeeping mechanisms, effectively limiting consumer choice and placing smaller competitors like WinZO at a disadvantage.

Further, the Commission raised concerns with Google’s justification that its payment warnings are part of compliance with regulatory guidelines from authorities like the RBI and NPCI, but such warnings are not made for Rummy and DFS applications.

This led to CCI forming a prime facie view that Google is in contravention to sections 4(2)(a)(i), 4(2)(b), and 4(2)(c) of the Act, and accordingly directed a DG investigation.

Epic Games, Inc. v. Google LLC (2023)

The Epic Games case serves as a critical precedent. In 2023, a U.S. jury found Google guilty of engaging in illegal practices to maintain its dominance in app distribution. Google had allegedly entered into agreements with original equipment manufacturers (OEMs), which are entities that manufacture and parts or products for other companies to sell under their own name. It was alleged that Google had paired with Samsung to restrict third-party app stores and enforce Google Play Store’s monopoly.

One key issue was Samsung’s Auto Blocker feature, which restricted app installations to the Google Play Store and Samsung Galaxy Store. Initially an opt-in feature, it became a default setting by 2024, creating significant barriers for users to download apps from third-party sources, violating the orders given by CCI in the Android case.  The court ruled that this feature was implemented in coordination with Google to undermine competition, effectively reinforcing Google’s market dominance.

Conclusion and Way Forward

The Epic Games ruling made apparent the critical need for a competitive app distribution market and reveals how coordinated actions among dominant players and OEMs can disadvantage smaller developers. Although legal frameworks differ in India, similar issues of market access and monopolistic behaviour are evident in Google’s actions against WinZO. This case highlights the significant power imbalance between tech giants and smaller creators, impacting innovation, competition, and user choices.

Practices such as issuing warnings and imposing restrictive policies can stifle innovation. Regulators must ensure a level playing field for emerging platforms. The Delhi High Court’s ruling in WinZO’s disparagement case exposed gaps in the legal framework, suggesting that expanding disparagement laws to include indirect reputational damage could better protect businesses.

Google claims its warnings aim to protect users, but the distinction between consumer protection and anti-competitive behaviour is important to mark. Excessive disclaimers that disproportionately impact smaller competitors can harm consumer choice. The Ministry of Electronics and Information Technology (MeitY) now needs to update regulations on permissible money games, which have remained stagnant for over a year.

The WinZO case goes beyond a mere legal dispute; it reflects the challenges faced by smaller players against tech giants. The outcome could redefine market dominance rules in India’s digital economy, emphasizing the need for regulators to address potential market power abuse, evolving brand disparagement issues, and the necessity for a competitive app distribution landscape. Balancing consumer protection with fair competition is vital for fostering an innovative digital ecosystem. For platforms like WinZO, this case represents not just survival but a call for a more equitable digital marketplace. With the numerous anti-competition charges that Google is facing in the recent years, perhaps the days of the Play Store monopoly are numbered.