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Fairfax fails to disclose Google ties in Unlockd yarn

The circumstances surrounding the Australian start-up Unlockd, which was forced to go into administration recently because Google played hardball with it, are another good reason for the competition watchdog to focus on the search behemoth in its digital platforms inquiry.

The Australian Competition and Consumer Commission's inquiry would do well to look at this whole episode closely. It would also do well to seek input from other small companies — and there are a fair few — who have faced similar treatment from Google.

As iTWire has pointed out, the ACCC should also look at the company's privacy violations — detailed here — as well, as that is closely tied to its core business.

And ACCC chief Rod Sims should not be swayed by the fact that the search behemoth has escaped regulatory scrutiny in the US. There is a good reason for that: because it had plenty of friends in government ranks.

Google's executives donated more money to the Obama campaign than any other company, proving the old adage that money makes the mare go.

In Unlockd's case, a type of behaviour was exhibited that has been alleged numerous times in the case of Google. That is, of a big organisation squeezing a smaller one just to put it out of business. (A detailed Q and A with Unlockd is here).

Now it might be presumptuous for a company of Unlockd's size to assume that it could be a future threat to Google. But that does not mean that its assumptions should be scorned.

The situation is not helped when media companies that have commercial arrangements in place with Google start muddying the water.

Which is exactly what Fairfax Media did in an article that claimed to be "analysis", a piece that was headlined "More to be Unlockd in tech start-up's fight with Google."

Unlockd's collapse was described therein as being "more complex, and in a sense more mundane". How so? And while the facts on the table indicate that Google did use its muscle, Fairfax Media said its "sources in the advertising industry and in tech circles paint a more nuanced picture".

Now exactly what these worthies knew about the case is not clear. The article pointed out that Unlockd had not obtained funding from what it described as "Australia's top VC funds". Does that mean that only start-ups backed by these VCs succeed? Hardly.

Crucially, the Fairfax writers failed to disclose the fact that the organisation has a commercial arrangement with Google on Web traffic generation. But then it may well have nullified their contentions altogether had they done so.

This appears to be the reason why Fairfax was one of the few organisations to avoid criticising Google in its submission to the ACCC's digital platforms inquiry. The advertising partnership it has with Google was disclosed right at the end of its submission.

Given the stage that Unlockd is at, it is impossible to say with any certainty whether it would succeed or not. Yet most of the Fairfax article painted a picture of a company that was counting its chickens well before they were hatched.

In any case, the aim of most start-ups is not to make a profit, but to keep increasing revenue and then finally get bought out. That's how VCs and founders make their money.

Carrying water for anyone and indeed everyone is not a crime. But it is well that people make it plain on which side their bread is buttered before they put finger to keyboard.

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.

 

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