Google sued for 'crushing' Aussie mobile ad startup

Unlockd founder Matt Berriman claims Google "crushed" his company by banning its app from its platforms. He says the tech giant feared competition for ad revenue. Photo / Supplied

COMMENT

The Australian Competition and Consumer Commission is in advanced stages of preparing evidence to launch legal action against Google over the demise of a high-flying mobile advertising startup Unlockd, the AFR reports.

Unlockd was billed as one of Australia's fastest-growing tech startups. It raised A$60m in just two years and was heading for an IPO last year at a valuation north of A$200m - but instead crashed into administration in June, just two months after Google banned it from the Google Play store and its AdMob marketplace.

A spokeswoman for Google Australia-NZ had no comment on the report of pending legal action, but did reiterate her company's earlier stance Unlockd broke its terms and conditions.

"Our publicly available AdMob and Google Play policies clearly set out how our products may be used, and are designed to protect the interests of advertisers, publishers and phone users. We explained our concerns to Unlockd, outlined how they could fix the problems or use alternatives, and gave them time to make changes," she told the Herald.

"And despite having agreed at the outset to comply with our product policies, apps using their technology continued to infringe our policies. Unlockd was given the opportunity to remedy its policy infringements but did not take that opportunity. "

Former Unlockd boss Matt Berriman claims Google banned his company's app from its platforms in a monopolistic move to block competition for ad revenue.

He says the ban made it impossible for Unlockd to do business.

Google is already fighting antitrust action in the US and Europe. The Unlockd case is expected to be filed early 2020.

If so, it will join a long list of frontline action being taken by the Australian Federal Government, and various of its agencies, against big tech.

Last week, the ACCC launched a Federal Court case against Google, alleging it misled consumers into thinking they had disabled location-tracking - when, in fact, the search-ad giant was still able to track every move they made. (Google would not comment in detail, but says it will defend the action.)

NZ Privacy Commissioner John Edwards dropped strong hints that the ACCC's sister agency in NZ, the Commerce Commission, should follow suit. But the ComCom, as ever, is restricting itself to a watching brief.

The Australian Government acted unilaterally against profit-shifting with its so-called "Google tax" on multinationals. Here, our Government is dithering over a digital services tax on big tech.

The ACCC's Digital Platforms Inquiry, released in July, recommended 23 changes to competition law to combat the dominance of Facebook and Google in the advertising market. It found there was not a level playing field, which was hindering the ability of traditional outlets to produce reliable news on an economically viable basis - with flow-on implications for democracy itself. Here, we're waiting for Commerce, Consumer Affairs, Digital Media and Broadcasting Minister Kris Faafoi to make some kind of statement, maybe somehow addressing the new media landscape in some fashion, before Christmas.

And after the Christchurch mosque massacres, the Australian Government has passed tough new legislation that threatens social media companies with fines of up to 10 per cent of their revenue and their executives with up to three years' jail if they fail to remove "abhorrent violent material expeditiously".

Here, Prime Minister Jacinda Ardern has chosen to work more collaboratively with big tech companies via the Christchurch Call.

The PM argues that only collaborative, global action will yield real change.

She could be right. Critics say Australia's unilateral action is impractical and will likely prove ineffective.

But so far, change has been marginal.