Unlockd, an Australian tech start-up backed by Lachlan Murdoch, has moved into voluntary administration following a legal clash with Google, which was attempting to disable its ad content and remove its app from its online store.
The company enables mobile phone users to opt in to advertisements in exchange for rewards. It was working on an initial public offering when Google banned its service and said it would remove it from its app store.
Unlockd had receive judgments from the High Court and the Federal Court of Australia, granting it interim injunctions that prevented Google from disabling its technology and removing its app.
But it said in a statement that Google’s actions had a “deep impact” on the business when considering the valuation of the company “prior to these threats”. Google declined to comment.
An IPO would have raised funds for the expansion of the business but with a listing on hold because of the Google intervention it said it had not been able to secure further capital. “We have been left no choice but to move into voluntary administration.”
Matt Berriman, co-founder of Unlocked, added: “We created something unique with Unlockd, rewarding consumers for watching ads. Having initially approved our Unlockd app, Google used its market dominance to destroy our business.
“As an innovative start-up, Google said: ‘Do no evil’. Now it’s a monopoly, it kills everything in its way.”
The development raises questions about Google’s market power and the scale and reach of its platform.
The US group last year was hit with a €2.42bn antitrust fine for abusing its dominance in search with the European Commission saying it “systematically” gave prominent placement to its own shopping service and had demoted rival comparison shopping services in search results.
The Unlockd case concerns Google’s app store policies, which prohibit publishers from paying users to view ads. However, Unlockd had been allowed to operate within the app store for a significant period with Google aware of its model and how it operates. The company deploys its technology for brands such as Tesco in the UK and Sprint in the US.
Unlockd pointed to the timing of Google’s action, which coincided with press reports about the start-up’s IPO plans.
“We believe that Google’s conduct and the effect of its actions represents a further example by them of anti-competitive conduct toward innovative start-ups such as Unlockd, that might pose a future threat to their position in the market,” it said.
Google in April said it had “explained” its concerns to Unlockd. “Despite having agreed at the outset to comply with our product policies, their app remains in infringement,” it said.