Oct 27, 2023

Madras HC Allows Application Filed by Google India and Google India Digital Services Seeking Rejection of Plaint Concerning Google Play Billing System

On August 03, 2023, a single judge bench of the Madras High Court (‘MHC’) allowed the applications filed by Google India Pvt. Ltd. and Google India Digital Services Pvt. Ltd. (‘Applicants’) seeking rejection of a plaint concerning the Google Play Billing system (‘GPBS’). [1]

The case arose out of a suit filed by Matrimony.com Ltd. (‘Matrimony’) before the MHC, seeking a declaration that the Applicants’ payment policy (and the payment policy of other defendants) on implementation of GPBS and user choice billing system vis-a-vis mobile applications are illegal and unenforceable. Matrimony also sought certain other reliefs including a permanent injunction restraining the Applicants and others from removing and delisting the mobile applications operated by Matrimony in ‘Google Play Store’ for its refusal to accept or subscribe to the Seller Terms of Service of Google Payments.

In their application, the Applicants argued the ouster of jurisdiction of civil court on several grounds including:(i) the subject matter of the suit is barred under Section 61 of the Competition Act; and (ii) the suit is not maintainable under Section 11 of the Commercial Courts Act, 2015.

The MHC firstly determined the validity of Clause 16.8 of the developer distributor agreement (‘DDA’) as it was alleged by Matrimony that the clause was unenforceable. According to Clause 16.8 of DDA, all claims arising out of the agreement will be governed by the laws of the
State of California, United States of America and subject to the jurisdiction of
Courts at Santa Clara, California. Therefore, it was alleged by the Applicants that Matrimony wrongly
invoked the jurisdiction of this Court.   It was found that the said clause excludes jurisdiction of all the Courts in India and would amount to total restraint of legal proceedings in India. Such a clause is hit by Section 28 of Indian Contract Act, 1872 and is hence, unenforceable.

Secondly, with respect to the submission on ousting the jurisdiction of civil court under the Payment and Settlements Act, 2007 (‘PSS Act’), the MHC noted that while there is no express provision in the PSS Act ousting the jurisdiction of a Civil Court, its provisions (Sections 17, 24, 26, and 28 etc.), make it clear that it is a complete code which designates an expert authority – the Reserve Bank of India – for enforcement of the PSS Act. The Court held that jurisdiction of the Civil Court is impliedly ousted by provisions of the PSS Act and Matrimony is not entitled to maintain a suit before this Court based on the PSS Act.

Thirdly, with respect to ouster of jurisdiction of Civil Court under Section 61 of the Competition Act, it was observed by this Hon’ble Court that the main contention of Matrimony is that the Applicants and its sister concerns abuse their dominant position(s) by imposing unconscionable and one-sided payment terms on application developers. In this regard, the Court found that abuse of dominant position by an enterprise is a concern that squarely falls within the jurisdiction of CCI. The court noted the order of the CCI (dated October 25, 2022) directing Google to not restrict application developers from using any third-party billing/payment processing services for app purchase or in-app purchase and held that the conduct in the instant case will attract scrutiny under Sections 3 and 4 of Competition Act.

Further, the Court viewed that the Competition Act has provided effective civil and criminal remedies in case of violation of CCI’s order and this in rem remedy is more comprehensive than the remedy available before the Civil Court which operates only in personem. Also, given that the Competition Act is a special law enacted to deal with abuse of dominance, Section 61 of the Competition Act will expressly bar the jurisdiction of Civil Court in respect of the matters which falls within the jurisdiction of CCI. Given this, the MHC held that the plaint filed by Matrimony is barred by virtue of Section 61 of the Competition Act.

[1] Matrimony.Com Ltd v. Alphabet Inc and Ors., No. 3098 of 2023 in C.S. (Comm. Div.) No. 98 of 2023.




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