“Can you opt out of the payment system in your contract?” the Supreme Court asked Indian app developers on November 3, as it heard their challenge to Google Play’s billing rules, LiveLaw Biz reported.

App developers, including Matrimony.com, want the court to declare Google’s payment terms illegal and unenforceable. They argue that the terms restrict them to Google’s billing system or a payment company authorised by Google. A bench of Justices PS Narasimha and Alok Aradhe will hear the case next on December 1.

What is the dispute about?

When users pay for digital content or make in-app purchases on Android apps, their payments usually go through Google Play’s billing system. Google charges developers a commission of 15% to 30%. Since January 2023, developers in India have been allowed to offer users an alternative billing system alongside Google’s. However, Google still charges them 11% to 26% on payments made through these alternative systems.

The developers’ challenge centres on a change Google made to its contracts on October 3, 2022. It introduced the term “Authorised Provider”, which refers to a third party “authorised by Google” to process payments for products sold on Google Play. Before this change, developers could sign up with any payment company, such as Razorpay or Paytm, they say.

They have also challenged Clause 15.3 of Google’s terms, which they say imposes restrictive payment conditions and charges.

The developers argue that both provisions violate the Payment and Settlement Systems (PSS) Act, 2007, which governs payment systems in India, and the Reserve Bank of India’s (RBI) guidelines.

What did the developers tell the court?

“Well, still now, yes, I can. I can use not the Google Play Billing System. I can use others. But because of the change in authorised provider, they are not forcing me to use either theirs or one of them authorised by them,” the developers’ counsel said in response to the bench’s question.

“As an app developer, I could contract any payment processor,” counsel added.

The Madras High Court was wrong to hold that the PSS Act bars their suits, counsel argued. Section 24 of the Act sets out how disputes between participants in a payment system, such as banks, are resolved. App developers only use these systems and are not participants in them, counsel said. “We are not even a system participant. We are users of that entire system,” counsel said.

The developers also argue that their claims stand independently under contract and civil law. These include allegations of undue influence and restraint of trade, as well as questions about whether Google’s terms are enforceable under the Indian Contract Act.

What did Google say?

The developers were turning a competition law dispute into a contract dispute, Senior Advocate Sajan Poovayya, appearing for Google, argued. The Competition Commission of India (CCI) had already examined Google’s billing policies and the fees it charges developers, and found that the fees were neither unreasonable nor excessive, he said.

The developers had initially approached civil courts alleging that Google abused its dominant position, a matter that falls within the CCI’s jurisdiction. They could not circumvent the CCI’s findings by raising similar complaints as a contract dispute, Poovayya argued.

The bench asked whether the CCI had specifically examined the clauses now under challenge and whether the disputed fee clause was part of the original agreement. Poovayya said the CCI had considered the relevant issues.

How did the case get here?

  • October 2022: The CCI fined Google Rs 936.44 crore for abusing its dominance through its Play Store billing policies. It also directed Google to allow third-party billing systems.
  • January 2023: Google introduced User Choice Billing, under which it charges four percentage points less when users pay through an alternative billing system.
  • August 2023 and January 2024: A single judge of the Madras High Court dismissed the developers’ suits. On January 19, 2024, a division bench upheld that decision, holding that the issues fell within the jurisdiction of authorities under the Competition Act and the PSS Act.
  • February 2024: The Supreme Court agreed to hear the appeals but refused to grant interim relief.
  • March 2024: Google removed apps, including Matrimony.com, Shaadi.com, Naukri and Kuku FM, for not complying with its billing policy. Naukri and Shaadi.com returned after removing in-app billing. Google reinstated ten other companies’ apps after IT Minister Ashwini Vaishnaw met Google and the developers.
  • March 2024: The RBI began examining whether Google Play’s billing system violated the PSS Act following a complaint from streaming platform Hoichoi, Outlook Business reported, citing unnamed sources. “The Google Play billing system is not a payment system, and we are addressing queries from the relevant authorities,” Google said.
  • March 2025: The National Company Law Appellate Tribunal (NCLAT) upheld the CCI’s finding that Google had abused its dominant position and its direction to allow third-party billing. However, it reduced the fine to Rs 216.69 crore.

How does the Digital Competition Bill fit in?

The dispute has continued since 2022 partly because the CCI can act against Google only after a violation, through investigations and penalties. The draft Digital Competition Bill (DCB), released by the Ministry of Corporate Affairs (MCA) in March 2024, would introduce rules for large digital platforms in advance.

Under the draft Bill, the CCI would designate large platforms as Systemically Significant Digital Enterprises (SSDEs) based on their turnover and user numbers. App stores are among the core digital services covered by the draft. Three proposed obligations are particularly relevant to this dispute:

  • Tying: An SSDE cannot require or incentivise users to use its other products or services alongside a core service, unless such use is integral to that service.
  • Anti-steering: An SSDE cannot prevent business users, such as app developers, from communicating with users or promoting offers to them, unless the restriction is integral to the service.
  • Self-preferencing: An SSDE cannot favour its own products or those of its partners over those of other businesses.

The CCI would determine what qualifies as “integral” and specify obligations for each service through regulations. Therefore, how the Bill would address Google’s “Authorised Provider” rule would depend on those regulations.

The Bill has not been finalised. The MCA has commissioned a market study to determine which companies and services it should cover. In August 2026, a parliamentary Standing Committee urged the government to finalise the Bill. The MCA has not said when it will do so.

Why it matters

The Supreme Court will decide where developers can fight Google’s billing terms. If it allows the suits, developers can argue in civil courts that the terms are unenforceable under contract law. If it doesn’t, they are left with the CCI and the RBI. The CCI can’t control Google’s commission because it doesn’t regulate prices, the developers argued in the Madras High Court. Until the Digital Competition Bill becomes law, those remain the only routes.

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