Google Vs Paytm Saga: A Clear Case Of Global Giants’ Discriminatory Behaviour In India

Google has been found guilty of abuse of dominant position and unfair trade practices by the European Commission, same could happen in India.

Google Vs Paytm Saga: A Clear Case Of Global Giants’ Discriminatory Behaviour In India

There was considerable brouhaha last week (on September 18) when Google removed financial services app Paytm from their Play Store platform for a few hours, before restoring it back, ostensibly for violating its anti-gambling policies.

In an official blogpost, Google India noted that as per its policy they do not allow ‘online casinos or support any unregulated gambling apps that facilitate sports betting. This includes if an app leads consumers to an external website that allows them to participate in paid tournaments to win real money or cash prizes, it is a violation of our policies.’

Google further noted that in case of violation of this policy, they notify the developer and remove the app from Google Play until the developer brings the app into compliance. It further warned that in case of repeated infractions, more serious action would follow, including termination of the Google Play developer accounts.

Paytm founder Vijay Shekhar Sharma reacted sharply to the move by slamming monopoly of certain global tech providers which ultimately harms the Indian startup ecosystem. He further called Google the ‘judge, jury and executioner’ and noted that the global giant had in the past only raised concerns about another app ‘Paytm First Games’, which is a joint venture between the Alibaba Group and Paytm’s parent company.

Sharma also added that the Paytm app did not have any real money gaming but merely had an offer where stickers can be availed on making certain payments under a scratch card scheme launched by the company ahead of IPL.

Following Paytm’s removal of the aforementioned scratch card scheme from the app, Google quickly restored the app on Play Store, signaling a temporary truce between India’s most valued startup and the global tech giant.

Whilst the fracas between the two behemoths seems to have been amicably resolved for now, larger issues surrounding Google’s ostensibly arbitrary powers to remove content at will, the monopolistic position it enjoys and denial of access to gaming apps have been brought to fore and requires deeper examination.

Google’s double standards
While Google Play has a clear policy to not allow any real money gaming apps that require a user to pay any entry fee or stake money in exchange of a possibility to win something tangible of monetary value (including games of skill that are permitted as per Indian law) on its platform, the same policy is not followed for their search engine business.

Google freely allows advertisements of real money games of skill in India such as fantasy sports, rummy, quiz etc. on its search engine platform and earns a sizeable amount of revenue through it, clearly raising questions on this dichotomy and inconsistency in policies across business verticals.

Further, Google’s policy of not allowing apps of gaming or gambling nature are not applicable in United Kingdom, Ireland and France, where gaming and gambling apps are allowed to be hosted on its platform, subject to compliance with certain specific conditions.

Curiously however, advertisements and game partnership of a leading real money fantasy sports provider – Dream 11, the title sponsors of IPL 2020 in UAE -- are prominently displayed on the Reliance Jio app, which is freely available on Play Store, raising questions as to whether Google’s policies against real money games are conveniently not enforced vis-à-vis the Reliance Jio app because of its business relation and association with the Reliance Group. (Google recently invested $4.5 billion in Jio Platforms for a 7.73% stake).

Abuse of dominant position?
The Competition Commission of India (CCI), the country’s antitrust regulatory recently observed that there was prime facie merit in the allegation that Google was abusing its dominant position in the smartphone market by not allowing access to competitor apps on the android operating system and directed the Director General Investigations to conduct a detailed probe.

Under the Competition Act, 2002, dominant position has been defined to mean a position of strength enjoyed by any enterprise which enables it to affect consumers or competitors or the relevant market in its favour.

Admittedly, as far as the smartphone market is concerned, mobile phones with android operating system command over 95% market share in India. Further, Google Play Store, which comes preloaded on android operating system mobile phones is probably the sole platform for distribution of mobile apps on such platforms and undoubtedly commands a dominating position in the smartphone market.

According to Section 4(2)(c) of the Competition Act, an enterprise is said to have abused its dominant position if it, inter alia, ‘indulges in practice or practices resulting in denial of market access in any manner.’

Given the above, it can indeed be argued that Google’s ostensibly arbitrary policy of disallowing real money games that are judicially and legislatively recognised to be legal in India on the Play Store platform, has resulted in denial of market access to such gaming companies.

Run-ins with antitrust regulators
It is also worth noting that Google has a chequered history with antitrust regulators in India and other parts of the world. The search engine giant has been found guilty of abuse of dominant position and unfair trade practices by the European Commission and CCI in the past, with cumulative penalties in excess US$ 8 billion imposed on it so far.
Along with other allegations of monopolistic and restrictive practices against the search engine giant, Google’s alleged unfair and arbitrary denial of market access to gaming and other similar apps could also end up at the CCI’s doorstep in the near future.

(The writer is a lawyer & advises the online gaming industry on legal, regulatory and policy issues. Views are personal)