A Division Bench of the Madras High Court on Monday restored a suit filed by education technology company Testbook against Google over the latter's billing policy [Testbook Edu Solution Pvt Ltd Vs Google India Pvt Ltd]..A Bench comprising Chief Justice K Shriram and Justice Senthilkumar Ramamoorthy set aside a single-judge order from April 30, 2024, which had held Testbook's suit to be not maintainable. "After the appeal was heard for some time, in our view, there are certain factual errors in the impugned order pronounced on 30.04.2024 and it is a fit case for us to quash and set aside the impugned order dated 30.04.2024," the Division Bench held in its January 20 ruling. It sent the matter back to the single-judge for fresh consideration, and also clarified that it has not said anything on the merits of the matter. Testbook was also permitted to move a fresh plea for a stay."It is open to appellant to apply to the learned Single Judge to restore the interim relief that he was enjoying and the learned may consider the same on merits. Again we do not express any opinion," the order said..Notably, in August 2023, Justice S Sounthar of the High Court had dismissed 14 petitions filed by several startup companies challenging Google's new user choice billing system. The single-judge reasoned that the dispute lay in the Competition Commission of India's (CCI) domain. In January 2024, a Division Bench of the High Court affirmed the single-judge's dismissal order. Appeals against the Division Bench judgment are presently pending before the Supreme Court. .Testbook's suit against the billing policy was dismissed by another single judge, Justice P Velmurugan after these developments. .Testbook had maintained that its suit was unique in several aspects and not liable to be dismissed only on account of the dismissal of earlier suits by other tech companies. It pointed out that it has challenged Clause 15.3 (related to termination of contract) of Google Play's new Developer Distributor Agreement (DDA), which other tech companies did not. Similarly, it also challenged Clause 2.1 of the Developer Terms of Service for the alternate billing system and Clause 3.4 of the DDA read with a clause concerning “Service Fee."It highlighted that it also raised concerns about a breach of privacy policy, the introduction of a consumption-only model which may restrain trade etc. which did not find a place in earlier suits. It added that its case involved questions of contract law and violations of the Payment and Settlement Systems Act, 2007 (PSS Act), which only a civil court could examine. .On April 30, 2024, Justice Velmurugan rejected these arguments and ruled that it was the CCI that had jurisdiction to examine Testbook's allegations against Google. It noted that other tech companies have already approached the CCI and that the matter is now pending before it. "Once the subject matters are lying before CCI and CCI is the statutory authority to decide those issues, the subject matter is expressly barred (from being heard by the Court) under Competition Act and impliedly bar(red) under PSS Act," the Court said, while allowing applications by Google to dismiss Testbook's suit.This decision has now been set aside by the Division Bench. .Earlier, the High Court granted an interim injunction to Testbook, allowing them to pay a reduced 4 per cent service fee to Google for using its in-app payment system. At the time, it had also restrained Google from delisting such companies from Play Store. This came after petitioners challenged Google's notice, which required app developers to adopt a revised app billing policy that was to be enforced from May 2023 or risk being delisted from the app marketplace. .Earlier, Google required all app developers to use its Google Play Billing System (GPBS) for all transactions including paid app downloads and in-app purchases. App developers were charged a commission between 15 to 30 per cent for the services that Google offered.In 2023, Google introduced the user choice billing system in India to comply with a Competition Commission of India (CCI) ruling from October 2022. This system allows app developers to offer an alternative billing option for in-app purchases alongside Google Play’s own billing service. Under the user choice billing system, if a user opts to pay via the alternative billing method, Google reduces the service fee by 4 per cent. This means developers will still have to pay a service fee to Google, albeit a reduced one ranging from 11 per cent to 26 per cent for in-app purchases and subscriptions, depending on the app’s type and its annual revenue on the Play Store. This has been objected to by several Indian start ups..Testbook was represented before the Madras High Court by Advocates Abir Roy, Devashish Marwah and Aman Shankar from Sarvada Legal.Google was represented by Senior Advocate PS Raman with Advocates G Balasubramanian, Vijayendra Pratapsingh, Sayobani Basu, Ankitesh Ojha S.Anand and P Arun Kumar.[Read Order]
