A prominent Australian start-up backed by News Corp co-chairman Lachlan Murdoch has applied for a UK court injunction to prevent it being banned from Google’s app store and mobile advertising inventory.

Unlockd, which develops technology that enables mobile phone users to opt in to advertisements in exchange for rewards, said on Monday that Google’s plan to ban its service was an abuse of its dominant position and a breach of competition rules.

The case marks the latest challenge to Google, which has faced an intensifying backlash from app developers, shopping comparison websites, media publishers and other businesses as its influence over internet and mobile users grows.

Unlockd relies heavily on the Google Play app store for downloads of its technology, which is deployed under other brand names including Tesco Mobile in the UK and Sprint in the US.

Users who agree to watch ads in exchange for discounts or other rewards from Tesco Mobile or Sprint see content that the start-up has sourced from Google’s AdMob inventory.

A decision to ban Unlockd from the app store and AdMob would upend the business, which said it had been forced to pull an initial public offering on the Australian Securities Exchange because of the uncertainty created by Google’s change of policy. 

“It is particularly striking that Google’s warnings emerged at a time of speculation around an Unlockd IPO in mid-April 2018,” Unlockd said. “Google’s anti-competitive conduct is preventing Unlockd from raising capital to continue its rapid expansion and innovation, and therefore protecting Google from a growing and potential competitor.”

Google’s advertising policies prohibit publishers from paying users to view ads. The company said it had engaged with Unlockd about its policies, which it argues are designed to protect the interests of advertisers, publishers and phone users.

Google said: “We explained our concerns to Unlockd, outlined how they could fix the problems or use alternatives and gave them time to make changes. And despite having agreed at the outset to comply with our product policies, their app remains in infringement.”

However, Unlockd has argued that Google is threatened by the idea of returning advertising revenues to users.

The US internet group has clashed with competition regulators over a number of issues, including whether it has abused its dominant position in search to impose unfair terms and restrictions on Android device makers and mobile phone companies. A decision from European regulators is expected this year.

The EU has fined Google €2.4bn last June for abusing its dominance in search to favour its own Shopping service. The company is appealing against the decision.

Unlockd’s business model is based on mobile users agreeing to view targeted advertising and other content on their mobile screens when they unlock their phones. In return they receive rewards such as mobile credit or loyalty points. 

The company has experienced rapid growth over the past four years, signing up content and advertising partners including Twitter, Yahoo, McDonald’s and British Airways. It boasts 330,000 users of its mobile app and has raised A$68m (US$53m) from investors, including A$30m in a fundraising round completed last year that was led by Malaysian telecoms group Axiata. Mr Murdoch is among several high-profile early investors. 

Additional reporting by Rochelle Toplensky in Brussels



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