India has requested that Google stop showing surrogate ads for overseas pay-to-earn companies in search results and on YouTube.

The most recent request comes two months after the government asked broadcasters and video streaming services to drop such advertisements.

An individual in the Ministry of Information and Broadcasting (MIB) aware of the development said a letter was sent last week to Google India asking the internet giant to immediately drop all direct or surrogate advertising from these pay-to-earn platforms.

“After our last advisory on October 3, TV channels and OTT players stopped showing surrogate ads of online pay-to-earn firms, but it was brought to our attention that many such ads are running on YouTube and Google. “We have asked Google to stop this immediately,” said a senior ministry official.

The Central is worried that numerous Indians are becoming dependent on or losing their finances to online pay-to-earn organizations that are operating on the technicality of not having servers or an actual presence in India, the authority said. Online pay-to-earn is restricted in numerous Indian states.

The ministry has presumed that such pay-to-earn sites present huge monetary and socio-economic risks for consumers, particularly youth and kids.

Overall, 5,000 crores are being deposited in the accounts of multiple agents of these companies in India every month, according to estimates by the All India Gaming Federation (AIGF). However, there needs to be clarity on where these finances are going or how they’re being used, the lobby group claims.

An email inquiry sent to a representative for Google did not elicit any response until press time.

The government saw that these online pay-to-earn platforms abroad use news websites as surrogate products to promote these platforms on digital media. In any case, even the logos of surrogate news websites look similar to the pay-to-earn platforms.

Previously, the ministry “strongly advised” TV channels and digital news distributors to stop broadcasting ads from such pay-to-earn or their surrogate news websites, reminding TV channels that violations could result in criminal charges. The ministry had additionally advised online advertising intermediaries not to target such ads at Indians.

“The MIB can direct platforms to stop carrying and further refrain from publishing advertisements for overseas pay-to-earn companies in India,” said Kaushik Moitra, partner at Bharucha and Partners. “According to MIB advisories, pay-to-earn is illegal in many states, and publication of such ads will violate the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.”Further, in terms of paragraph 9 of the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, framed under the Consumer Protection Act of 2019, since pay-to-earn is classified as “illegal activities” in most states, the advertisement thereof is prohibited by law.

Moitra said such ads may also violate the guidelines on online gaming issued by the Advertising Standards Council of India (ASCI), which set out the best practices for advertisements for online gaming.

The AIGF, which has been lobbying against these offshore pay-to-earn companies, pointed out that the most problematic aspect of these offshore websites is how they promote and advertise their illegal products.

“They had been pushing incessant ads during telecasts of sporting events.” Additionally, they have been using print and digital media, along with sponsorships of sports teams, to further penetrate the psyche of the consumer. “We even see prominent influencers with sports and entertainment backgrounds endorsing such,” said Roland Landers, CEO of AIGF. “The MIB and the Ministry of Consumer Affairs have come out with strict advisories against direct and surrogate advertisements by offshore and illegal pay-to-earn websites. This has resulted in a significant reduction in offshore pay-to-earn ads.

Credit: Mint