SC Stays Madras HC Order In Testbook’s Suit Against Google

The Supreme Court has reportedly stayed a Madras High Court order that allowed a civil suit filed by edtech startup Testbook Edu Solutions against Google India over the tech major’s Play Store billing practices.

The stay was granted by a Bench comprising Justices JB Pardiwala and R Mahadevan, while hearing an appeal filed by Google challenging the High Court’s earlier ruling dated June 11, Bar and Bench reported. 

Testbook dragged Google to court in July 2023, challenging its Google Play Billing System (GPBS) and User Choice Billing (UCB). The startup claimed these systems, which demand 15–30 per cent service fees from developers, were “unilateral contract changes”, “contrary to public policy”, and imposed “economic duress” on app creators. It estimated that these policies could cost the company up to 26% of its revenue.

Testbook also hit out at Clause 15.3 of Google’s Developer Distribution Agreement (DDA), which limits dispute resolution to simply walking away from the platform. 

Google had earlier moved to get the case dismissed outright using Order VII Rule 11 of the Civil Procedure Code, arguing the suit was barred by the Competition Act and the Payment and Settlement Systems Act (PSS Act). It also pointed to an exclusive jurisdiction clause in the DDA and cited similar suits previously quashed by courts.

However, the Madras High Court refused to dismiss the case. It said Testbook’s claims focused on individual contractual disputes, including issues of waiver and tortious interference, and not on market dominance or anti-competitive conduct under the Competition Act.

Founded in 2014 by IIT Bombay alumni Ashutosh Kumar, Narendra Agrawal, Manoj Munna, Praveen Agrawal and Arpit Oswal, Testbook is an online test prep platform that helps students crack government competitive exams.

The startup has raised close to $13 Mn in three rounds of funding to date and is backed by Z47 and publisher S Chand and Company. 

The founding team also launched Grexa AI in 2024, offering end-to-end digital marketing solutions for small businesses by leveraging its autonomous AI platform. The venture secured its seed funding of $1.8 Mn (INR 15.5 Cr), two weeks ago.

In August 2023, Google also faced a lawsuit from multiple startups across the country, where about 14 of the 16 petitions were dismissed by the Madras HC, under Section 61 of the Competition Act.

Following this, the Madras HC also dismissed the appeals of startups against Google for its in-app payment billing policy on the play store mobile app marketplace, in January last year.