SC to decide forum for Google billing disputes

NEW DELHI: The Supreme Court on Tuesday said that it will examine whether a civil court or the Competition Commission of India (CCI) can hear petitions by application developers challenging Google India's Google Play Billing System and User Choice Billing, which mandate service fees ranging from 15-30% from the developers.

Questioning the app developers on whether their contracts with Google allowed them to opt out of its payment system and engage other payment service providers, a bench comprising Justices PS Narasimha and Alok Aradhe said that the commission, being a market regulator, ensured that goods and services were distributed effectively without exploitation. But for contracts where there was a promise and agreement in existence, its enforcement could be sought in a civil court only, it said.

Observing that the case related less with the Competition Act and more with the Payment and Settlement Systems Act, the apex court added that matters like these where jurisdiction issue was to be decided were not simple to determine, but had "important implications."


It also asked the developers and Google India to file their stand on whether there was a conflict between the Payment and Settlement Systems Act 2007 and the Competition Commission of India Act 2002. The case will be heard next in December.

The top court was hearing a batch of petitions filed by app developers like Matrimony.com, Info Edge (India) and others, challenging a Madras High Court's judgment from June last year that dismissed their petitions challenging Google's billing policy. The policies amounted to a unilateral novation of its agreement with developers, they argued, adding that they were contrary to public policy and imposed undue economic duress on developers. The policies also restricted their freedom to choose payment processors by requiring them to use providers authorised by Google, they added. The high court had held that the CCI would be the appropriate forum to voice these grievances.

The developers had sought declarations that Google's Payment Terms of Service, Payment Policies and Developer Distribution Agreement were illegal and unenforceable.

They also challenged the definition of 'Authorised Provider', alleging that these provisions impose restrictive payment terms and charges in violation of the Payment and Settlement Systems Act, 2007 and the RBI guidelines.

However, Google said the application developers' petitions were barred under the Competition Act, 2002 and the Payment and Settlement Systems Act, 2007, which expressly ousts civil jurisdiction in respect of matters within the domain of the CCI and the National Company Law Appellate Tribunal. Even the allegations concerning the 2007 Act are solely within the purview of the Reserve Bank of India, it said.