Digital ad app asks Ninth Circuit to lift Google’s ban

SAN FRANCISCO (CN) — A Ninth Circuit panel asked an e-commerce tech company how Google banning its advertising app harmed the marketplace Friday, after a lower court judge dismissed its antitrust lawsuit against the tech behemoth last year.

Unlockd Media’s app allows phone users to be shown full-screen ads when they unlock their phone in exchange for discounts and rewards. Google removed the app from its app store, which has a policy prohibiting ads shown outside an app’s own environment and prohibiting apps from encouraging users to click on ads.

The tech company argued U.S. District Judge Haywood Gilliam got it wrong when he said Google’s prohibition only hurt Unlockd and not the digital advertising marketplace.

“We believe that is demonstrably false,” Unlockd attorney Justin Strother, from the Houston-based firm Diamond McCarthy, told the three-judge panel.

Strother said the Barack Obama appointee ruled that Unlockd “offered no factual support from which the court could assume that harm to the plaintiff is somehow tantamount to harm to this entire market.” But he explained to the panel how there was harm to the end users who would see the ads on their mobile phones and to the advertisers who are buying the digital space.

“What is the breadth of your market?” asked U.S. Circuit Judge Jacqueline Nguyen, an Obama appointee.

Strother answered that the marketplace for digital advertising is nationwide plus six other countries, and entails all mobile devices.

“That’s a very broad market,” Nguyen responded, indicating it may be difficult to prove antitrust behavior by Google with a marketplace that large.

Strother said even Google is harmed by the ban, noting that through Unlockd’s app the end user received monetary rewards for clicking on ads, with Google taking up to 30% of the revenue. With the prohibition, Google doesn’t get any slice.

He also implied that Google saw Unlockd’s app as a threat, pulling more advertisers to its “superior product” from Google’s own products.

“Google initially approved Unlockd apps, then investigated over a period of a couple of years, intermittently reversing course and saying ‘we need to know more.’”

Google attorney Dee Bansal said Unlockd failed to prove it had standing to bring its antitrust action against Google because there was no harm to the marketplace by disallowing the app.

“Unlockd only pleaded harm to itself, not harm to competition as a whole,” she said. “They would like this court to believe that the removal of this singular app is going to have any impact on prices, output, innovation."

In rebuttal, Strother said removing a national competitor from the marketplace can itself equal injury to competition.

“This court can decide on the basis alone that Unlockd was removed, that there was injury,” he said.

U.S. Circuit Judge Lawrence VanDyke, a Donald Trump appointee, and U.S. District Judge Robert Huie, a Joe Biden appointee sitting by designation, rounded out the panel.