Competition, Startup News & Analysis

Unlockd goes into administration, laying the blame squarely with Google’s “anti-competitive conduct”

Stephanie Palmer-Derrien /

Unlockd

Unlockd co-founder and former chief executive Matt Berriman. Source: Supplied.

Once-promising Australian startup Unlockd has entered voluntary administration, which it has blamed squarely on its ongoing legal dispute with Google.

The Unlockd app allows Android phone users to receive rewards for viewing advertising content and, as of April, had some 330,000 users.

However, earlier this year, Google threatened to remove the Unlockd app from its Google Play Store globally and deny the startup access to its Admob in-app advertisement server, saying it breached terms of use.

The threat came ahead of Unlockd’s IPO on the Australian Securities Exchange, which was originally planned for April this year.

The startup postponed the IPO and took Google to court, with a statement at the time saying the technology giant’s threats represented “an abuse of its dominant position and breach of competition rules”.

Since then, Unlockd has won cases in the English High Court and the Federal Court of Australia, granting interim injunctions to stop Google from blocking its services.

However, a statement released by Unlockd yesterday said the case, and the subsequent postponement of the IPO, has had a devastating impact on the business.

“The ramifications of Google’s actions have had and continue to have a deep impact on the business when considering the valuation of Unlockd prior to these threats and the postponement of the planned IPO, which would have fueled the continued growth and expansion of the business,” the company said in the statement.

“As such, we have not been able to secure the capital we had expected to replace the IPO and therefore have been left no choice but to move into voluntary administration.”

The statement went on to say Unlockd offered users value from advertising “in a way that Google and other big tech companies do not”.

It also suggested that the ongoing saga is a further example of “anti-competitive conduct” towards startups “that might pose a future threat to their position in the market”.

“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.”

Founded in 2014, Unlockd has raised a total of over $60 million in venture capital to date, including $30.8 million in Series B funding led by Axiata Digital, an arm of Asian telco giant Axiata Group, in one of the largest capital raises last year.

However, this is the latest blow in what has been a turbulent 2018 for the company. In February, co-founder Matt Berriman stepped down as chief executive to focus on his battle with bipolar disorder, taking on the role of executive director and naming Jane Martino – one of the startup’s early investors and chief operating officer – as the new chief.

In April, when the legal troubles started, Berriman told StartupSmart Google’s initial threats were a reversal from its position, saying Unlockd had written permission to use AdMob, and the green light to list on the Play Store.

He said at the time: “Unlockd has not made any changes to the app that justifies a change of approach. The legal advice we have received is that Google’s actions represent an abuse of Google’s dominant market position and are intended to eliminate our innovative offering from scaling and being in a position to compete with Google.”

He added: “We believe this stifling of competition is harmful to consumers.”

However, in a statement to Fairfax, a Google spokesperson reportedly said the company had explained its concerns to the startup and given it time to make advised changes, before taking action.

The Unlockd board of directors is working with administrators to determine the startup’s next steps, and are assessing ongoing discussions around further investment or acquisition.

NOW READ: Car manufacturing startup Tomcar Australia collapses into administration

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Stephanie Palmer-Derrien

Stephanie Palmer-Derrien is a reporter at StartupSmart.

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