India bans Krafton under the law it used to block the source of China apps

A picture of a Google sign outside the Google office in Berlin, Germany, August 31, 2021. REUTERS/Annegret Hilse/File Photo

NEW DELHI, July 29 (Reuters) – India has banned a popular Battle Royale style game from Krafton Inc. (259960.KS)a South Korean company backed by China’s Tencent (0700.HK)using a law it has based on since 2020 to block Chinese apps out of national security concerns, a source said.

Battlegrounds Mobile India (BGMI) has been removed from Alphabet Inc (GOOGL.O) Google Play Store and Apple Inc’s (AAPL.O) App Store as of Thursday evening in India.

The removal of BGMI, which had more than 100 million users in India, comes after India’s 2020 ban on another Krafton title, PlayerUnknown’s Battlegrounds (PUBG).

The PUBG campaign was part of New Delhi’s ban of more than 100 mobile apps of Chinese origin, after a months-long border standoff between the two nuclear-armed foes.

The ban has since expanded to more than 300 apps, including popular gaming app Free Fire, owned by Singaporean technology group Sea Ltd. (SE.N).

Tencent owned a 13.5% stake in Krafton as of the end of March through an investment vehicle, according to Krafton’s regulatory filing.

Krafton shares fell more than 9% on the news on Friday, later paring losses to fall 4.5% as of the afternoon in Seoul. The company said in May that India accounted for a high single-digit percentage of its revenue in the first quarter of this year.

A Google spokesperson said it banned the game following a government directive, while India’s Ministry of Information Technology and Apple did not respond to requests for comment.

In Seoul, a Krafton spokesperson said the developer was talking to relevant authorities and companies to find out the exact position regarding suspensions on two major app stores in India.

“The government does not interfere with which applications can and which cannot work. They do interfere with digital security and privacy concerns, and BGMI adheres to all guidelines. MeitY (Ministry of Electronics and Information Technology) also noted that PUBG and BGMI are two different games,” Sean Hyunel Son Krafton India CEO told news portal TechCrunch earlier this week.

China influence

The source, who was directly aware but declined to be identified due to the sensitivity of the matter, said India had invoked a section of the Information Technology Act to enforce the ban.

Section 69a of India’s Information Technology Act allows the government to block public access to content in the interest of national security, among other reasons. Orders issued under this section are generally confidential in nature.

Abhay Mishra, president of Prahar, said Swadeshi Jagran Manch (SJM) and the non-profit organization Prahar have repeatedly asked the government to investigate “China’s influence” on BGMI. SJM is the economic wing of the Rashtriya Swayamsevak Sangh, an influential Hindu nationalist group close to the ruling party of Prime Minister Narendra Modi.

“In the so-called new avatar, BGMI is no different from the previous PUBG with Tencent still controlling it in the background,” Mishra said.

The ban sparked a strong online reaction from popular gamers in India on Twitter and YouTube.

“I hope our government realizes that thousands of sports athletes and content creators depend their lives on BGMI,” said Abhijit Andhir, a Twitter user with over 92,000 followers.

Additional reporting by Aditya Kalra, Monsef Fengatel in New Delhi and Joyce Lee in Seoul; Additional reporting by Nupur Anand. Editing by Kirsten Donovan, Clarence Fernandez and Muralikumar Anantharaman

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