Madras High Court Rejects Google’s Plea to Dismiss Textbook’s Suit on Play Store Charges

The Madras High Court has refused to reject a lawsuit filed by ed-tech company Testbook Edu Solutions Pvt. Ltd. against Google and its parent companies, paving the way for a full hearing on allegations that Google’s app store billing practices are arbitrary, coercive, and legally unenforceable.

The bench of Justice Senthilkumar Ramamoorthy dismissed an application filed by Google India Pvt. Ltd. and Google India Digital Services Pvt. Ltd. under Order VII Rule 11 of the Civil Procedure Code, which sought to have the suit thrown out at the preliminary stage. The application claimed that the civil suit was barred by law, particularly under the Competition Act, 2002 and the Payment and Settlement Systems Act, 2007.

Testbook, which runs 736 educational apps through the Google Play Store, alleged that Google unilaterally imposed a 15–30% service fee through its Play Billing System, leveraging its “superior bargaining power” due to its dominance in the Android ecosystem (96% market share). The plaintiff also challenged clause 15.3 of the Developer Distribution Agreement, which effectively forces developers to either accept new terms or exit the Play Store.

Notably, similar suits filed by other developers were previously dismissed, and the division bench of the Madras High Court had upheld those dismissals. However, the present bench found that Testbook’s plaint raised additional issues — including specific allegations of tortious interference, economic duress, and notably, waiver of Google's right to charge service fees due to its prolonged history of not doing so.

Court ruled that while the CCI could adjudicate issues concerning market-wide anti-competitive behavior, civil courts are not barred from entertaining contractual disputes between private parties.

Justice Ramamoorthy emphasized that ouster of civil court jurisdiction must be clear and cannot be lightly inferred.

"In contrast to the in rem proceedings before the CCI, in the present suit, the plaintiff has only requested for relief in relation to the specific bilateral contract(s) between the parties to the suit. Such in personam disputes cannot be adjudicated by the CCI, which is statutorily empowered to examine whether an enterprise has abused its dominant position in the relevant market and not whether one party to a contract is in a dominant position vis-a-vis the counter party and whether, in that context, the relevant contract was entered into without the free consent of the aggrieved counter party or is otherwise in violation of public policy because it is unconscionable on account of the abuse of the unfair bargaining power. The above discussion leads to the conclusion that the present suit is not barred by Section 61 of the Competition Act," the single judge bench held. 

Case Title: Google India Pvt. Ltd. and Another vs Testbook Edu Solutions Private Limited and Others