India bans Crafton over data-sharing concerns in China – source

NEW DELHI/SEOUL, July 29 (Reuters) – The Indian government has banned the popular Battle Royale game from Crafton. (259960.KS)a South Korean company backed by China’s Tencent (0700.HK)as it was concerned about data sharing and mining in China, an Indian government source said.

New Delhi has used powers it has under India’s IT law to ban Battlegrounds Mobile India (BGMI), relying on a clause it has invoked since 2020 to ban several other Chinese apps related to national security concerns, said the government official and another source with direct knowledge.

The Indian government has not publicly announced the ban. But the app 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 the South Asian country in 2020 banned 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 the 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 close down 4.5% 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.

Shares of Tencent Holdings fell 4.9 percent to their lowest level since March 15.

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. The sources declined to publish their names because these orders are confidential.

The Chinese embassy in New Delhi did not immediately respond to a request 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.

Shaun Hyunel Sohn, CEO of Krafton India, told news portal TechCrunch earlier this week that the Indian government had previously indicated that PUBG and BGMI are two different games, adding that “BGMI complies with all guidelines” in India.

China influence

The two sources told Reuters that India had invoked a section of the Information Technology Act, called 69a, to enforce the ban.

The department 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 was 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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