Unlockd advertising start-up blames Google as it goes into voluntary administration
Unlockd was a promising start-up, but has entered into voluntary administration after Google threatened to block its app on the Play Store. (Unlockd)
Unlockd was meant to be one of Australia’s “hottest” start-ups, but the app-maker has fallen into voluntary administration, and blames Google for its misfortune.
It was planning to list on the ASX, and had financial backing from the likes of Lachlan Murdoch, former Telstra boss Sol Trujillo, and Seven Group’s former managing director Peter Gammell.
But it faced an “unanticipated threat” from Google in April to “remove Unlockd’s apps from the Google Play Store ecosystem and deny access to its ad server Admob”, the company wrote in a statement.
As a consequence, Unlockd said it was forced to shelve its share market float.
The board of Unlockd is currently in discussions with administrators about future investment and potentially being taken over.
Unlockd had ‘no choice’
The start-up sued Google in both the English High Court and Federal Court of Australia — to obtain temporary injunctions, aimed at preventing Google from acting on its allegedly anti-competitive and unconscionable threats.
Unlockd was successful in both court cases, but said Google’s actions “continue to have a deep impact on the business”.
The company said its valuation had dropped considerably since Google claimed the Unlockd app breached some of its policies on the Google Play and Admob platforms.
“As such, we have not been able to secure the capital we had expected to replace the IPO [initial public offering] and therefore have been left no choice but to move into voluntary administration,” the company said.
“Until wide-reaching change is brought about to prevent companies like Google from abusing their dominant market positions, consumers and innovation will continue to suffer.”
Breaching Google’s policies
Google’s spokesperson disputed Unlockd’s version of the facts.
“We explained our concerns to Unlockd, outlined how they could fix the problems or use alternatives, and gave them time to make changes,” the spokesperson said.
“And despite having agreed at the outset to comply with our product policies, apps using their technology remain in infringement today.”
Unlockd is alleged to have breached a Google Play policy, which prohibits mobile apps from interfering with the functions of a mobile device, or another app.
That policy states:
“Ads associated with your app must not interfere with other apps, ads, or the operation of the device, including system or device buttons and ports.
“This includes overlays, companion functionality, and widgetized ad units. Ads must only be displayed within the app serving them.
The ‘win-win’ business
The company markets its app as a “win-win” for advertisers and consumers.
When users unlock their smartphones, the Unlockd app displays targeted advertising based on profile information like their age, gender and interests — which need to be provided in order to use the app.
As a reward for watching the ads, users earn credits, which can be redeemed for mobile credit, mobile data, premium entertainment content or loyalty points.
Unlockd said its content advertising partners included Twitter, Yahoo, McDonald’s, British Airways, Doritos and Uber.
The start-up was founded by Melbourne businessman Matt Berriman in 2014, and launched two years later.