Google has finally banned binary options from its Play store. A binary option is a type of option in which the customer must state whether a given asset will be above a certain price by a specific time. Because it is virtually impossible for an investor to trade with an edge, binary options are regarded as a form of gambling by many. These firms appeal to individuals who are familiar with other forms of options trading, but many be unaware of the low success rate with this type of trading. Google’s ban, however, comes on the heels of other restrictions placed on financial apps available in its store, and follows other actions taken by regulatory bodies and other companies.
Google’s ban was prompted by an investigation carried out by the Australian Competition and Consumption Commission. The Australian authorities advised Google that they had uncovered evidence of hundreds of millions of dollars in losses which were unaccounted for as a result of these investments, which are provided by firms that operate with relative anonymity. Other countries have undertaken similar investigations into brokerages that provide binary options trading.
As part of the ban, Google reserves the right to remove or place restrictions on apps that facilitate transactions that may be deemed extremely risky, such as CFDs (Contracts for Difference), cryptocurrency applications, and Forex spot trading. In addition to the ban on binary options, Google affirmed that it would continue to remove applications that facilitate counterfeiting and fraudulent activity.
Google’s policy announcement should not come as a complete surprise, as the search engine had already announced a ban on related ads in its Adsense advertising service. Adsense, which allows advertisers to target potential customers through Google’s search results, has tightened restrictions on financial products. In fact, as of June 2018, only authorized advertisers are allowed place ads related to trading.
One of the first jurisdictions to prohibit binary options was Israel, which argued that this instrument is a form of gambling and not a legitimate type of investment. The ESMA followed suit in December 2018, reissuing restrictions on binary options trading in Europe. Apple had already taken action before Google, banning binary option apps in 2018. Moreover, Facebook had previously prohibited advertising related to binary options in January 2018. In addition to Google’s tightening of its position, it is likely that other restrictions may follow on other platforms in the near future.