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India blocks Krafton’s game over China data sharing concerns – source

India blocks Krafton's game over China data sharing concerns - source
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Battlegrounds Mobile India game and logo are seen in this image dated July 29, 2022. REUTERS/Dado Ruvic/Illustration

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NEW DELHI/SEOUL, July 29 (Reuters) – The Indian government has blocked a popular Krafton Inc. battle royale format game (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 used its powers under India’s IT Law to block Battlegrounds Mobile India (BGMI), relying on a provision it has invoked since 2020 to block several other Chinese apps on national security grounds ban, said the government official and another source with direct knowledge.

The Indian government has not publicly announced the lockdown. But the app was removed by Alphabet Inc (GOOGL.O) Google Play Store and Apple Inc (AAPL.O) App Store starting Thursday evening in India.

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

The crackdown on PUBG was part of the ban on more than 100 Chinese-origin mobile apps in New Delhi following a months-long border deadlock between the nuclear-armed rivals.

The ban has since been extended to more than 300 apps, including popular gaming app Free Fire owned by tech giant Sea Ltd. heard from Singapore (SEN).

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

Krafton shares fell more than 9% after Friday’s news and later pared losses to close 4.5% in Seoul. The company said in May that India accounted for a high single-digit percentage of its sales in the first quarter of this year.

Tencent Holdings shares fell 4.9% to their lowest level since March 15.

A Google spokesman said it blocked the game due to a government directive, while India’s IT ministry and Apple did not respond to requests for comment. The sources declined to be named as such orders are confidential.

The Chinese Embassy in New Delhi did not immediately respond to a request for comment.

In Seoul, a Krafton spokesman said the developer is talking to relevant authorities and companies to find out the exact situation regarding the suspension in India’s two major app stores.

Sean Hyunil Sohn, CEO of Krafton India, told TechCrunch earlier this week that the Indian government had previously determined that PUBG and BGMI are different games, adding that “BGMI complies with all guidelines in India”.

“CHINA INFLUENCE”

India was invoking a section of its IT law called 69A to impose the ban, the two sources with direct knowledge told Reuters.

The section allows the government to block public access to content in the interest of national security, among other things. Orders placed under this section are generally confidential in nature.

Swadeshi Jagran Manch (SJM) and the nonprofit organization Prahar have repeatedly urged the government to investigate BGMI’s “China influence,” Prahar President Abhay Mishra said. SJM is the business wing of the Rashtriya Swayamsevak Sangh, an influential Hindu nationalist group affiliated with Prime Minister Narendra Modi’s ruling party.

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

The ban sparked strong online reactions from popular players in India on Twitter and YouTube.

“I hope our government understands that thousands of esports athletes and content creators and their lives depend on BGMI,” tweeted Abhijeet Andhare, a Twitter user with more than 92,000 followers.

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Reporting by Aditya Kalra and Munsif Vengattil in New Delhi, Joyce Lee in Seoul; Additional reporting by Nupur Anand; Editing by Kirsten Donovan, Clarence Fernandez and Muralikumar Anantharaman

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