Madras HC: Civil Suit on Google Play Store Contractual Terms Not Barred by Competition Act/PSS Act, Even with Market Dominance Claims (Order VII Rule 11 CPC) - 2025-06-13

Madras High Court Upholds Civil Suit Against Google on Play Store Policies , Dismisses Plea for Rejection

Chennai, India – The Madras High Court, in a significant ruling pronounced on June 11, 2025, held that a civil suit filed by ed-tech company Testbook Edu Solutions Private Limited against Google , challenging its Play Store payment policies and contractual terms, is maintainable and not barred by the Competition Act, 2002, or the Payment and Settlement Systems Act, 2007 (PSS Act).

Honourable Mr. Justice SenthilkumarRamamoorthy dismissed an application (A.No.4193 of 2023) filed by Google India Pvt. Ltd. and Google India Digital Services Pvt. Ltd. seeking the rejection of Testbook 's plaint under Order VII Rule 11 of the Code of Civil Procedure (CPC). The court found that Testbook 's allegations primarily concern bilateral contractual disputes, which fall within the civil court's in personam jurisdiction, distinct from the in rem jurisdiction of the Competition Commission of India (CCI).

Case Background

Testbook Edu Solutions, an ed-tech services company, filed a suit (C.S.(Comm Div) No.186 of 2023) seeking to declare Google 's Payment Terms of Service-Seller Payment Policies, clause 15.3 of the Developer Distribution Agreement (DDA), and service fees under the Google Play Billing System (GPBS) and User Choice Billing (UCB) system as illegal and unenforceable. Testbook also sought a permanent injunction to prevent Google from delisting its apps from the Google Play Store for refusing these terms.

Google (applicants/defendants in the main suit) moved to reject the plaint, arguing it disclosed no cause of action and was barred by law, specifically citing the exclusive jurisdiction of the CCI under the Competition Act and the regulatory framework of the PSS Act.

Key Arguments

Google 's Contentions (Represented by Senior Advocates Mr. P.S. Raman and Mr. Sajan Poovayya):

* The suit was substantially similar to previously rejected plaints by other app developers, with only "cosmetic changes" like using "superior bargaining power" instead of "abuse of dominant position."

* The issues raised, including service fees and alleged abuse of market position, fall squarely within the CCI's purview.

* The PSS Act implicitly bars civil court jurisdiction over payment system disputes, vesting authority in the RBI.

* Even the plea of 'waiver' raised by Testbook was linked to allegations of abuse of dominant position.

Testbook 's Contentions (Represented by Advocate Mr. Abir Roy):

* The current plaint contained specific pleadings on violations of the Indian Contract Act, 1872 (ICA), including undue influence (Section 16), novation (Section 62), and waiver, which were not central to previously rejected suits.

* The plea of waiver, based on Google not enforcing service fees for years, was a new and distinct cause of action triable by a civil court.

* The CCI's jurisdiction under the Competition Act is to examine abuse of dominant position in the "relevant market," an in rem inquiry, whereas the current suit involves in personam contractual disputes.

* Civil courts can examine issues of unequal bargaining power in contracts.

* The PSS Act does not oust civil court jurisdiction for adjudicating contractual validity.

Court's Reasoning and Legal Principles Applied

Justice Ramamoorthy meticulously analyzed the scope of Order VII Rule 11 CPC, Section 61 of the Competition Act, and the nature of jurisdiction exercised by civil courts versus the CCI.

Jurisdiction under Competition Act vs. Civil Court: The court emphasized the distinction between the CCI's role and that of a civil court: > "The scope of inquiry would be limited to whether the defendant is in a dominant or unequal bargaining position vis-a-vis the plaintiff and not whether the defendant is in a dominant position vis-a-vis the relevant market." (Para 32)

The judgment clarified that while the CCI is empowered to conduct an in rem inquiry into anti-competitive agreements or abuse of dominant position affecting the market as a whole, a civil court adjudicates in personam disputes concerning specific contractual rights and obligations between parties.

Testbook 's allegations regarding violations of the ICA (undue influence, novation, unconscionable terms, waiver) were deemed to be primarily concerning the bilateral contract(s) with Google . > "Such in personam disputes cannot be adjudicated by the CCI... The above discussion leads to the conclusion that the present suit is not barred by Section 61 of the Competition Act." (Para 36)

The court noted that the plea of waiver, alleging Google waived its right to charge service fees by not doing so for a considerable period, was a specific contractual argument that required examination. While its sustainability was debatable at this stage, it formed part of the cause of action.

Jurisdiction under PSS Act: The court found no express or implied bar in the PSS Act to a civil court's jurisdiction over the current dispute. > "With reference to the facts of this case, it does not appear that either the panel [under PSS Act] or the RBI can determine the dispute relating to the contractual terms being allegedly in violation of the PSS Act and, therefore, invalid... I conclude that the plaint is not liable to be rejected as barred under the PSS Act." (Para 38)

Disclosure of Cause of Action: The court held that, based on the averments in the plaint, it could not be concluded that no cause of action was disclosed, irrespective of the ultimate merits. > "...it certainly cannot be concluded that no cause of action is disclosed in the plaint." (Para 40)

Exclusive Jurisdiction Clause: The court also clarified that an exclusive jurisdiction clause in a private contract does not constitute "law" for the purpose of rejecting a plaint under Order VII Rule 11(d) CPC.

Final Decision and Implications

The High Court dismissed Google 's application to reject Testbook 's plaint, allowing the suit to proceed to trial. The court made no order as to costs.

This judgment reinforces the principle that while specialized tribunals like the CCI have exclusive jurisdiction over matters concerning market-wide competition, civil courts retain jurisdiction over bilateral contractual disputes, even if one party holds significant market power. The decision underscores that allegations of contractual breaches, unconscionability, and waiver under the Indian Contract Act are primarily matters for civil adjudication. The order allows Testbook to argue its case on merits, concerning the fairness and legality of Google 's Play Store policies as applied to them.