Pay Per Swipe, the mobile advertising company that makes ads that appear on locked smartphone screens, has filed a lawsuit against TCT Mobile for allegedly breaching a contract and for engaging in unfair business practices.
According to a report, the lawsuit contends that TCT, which shares an address with Alcatel, breached a non-disclosure agreement and used information the company deemed confidential about two products they jointly developed for its own gains.
The lawsuit argues TCT used the information to ink a deal with Amazon, in which it is part of its program to offer lower cost smartphones to Prime members in exchange for viewing ads. According to the report, Pay Per Swipe contends it was cut out of that deal with Amazon and that it is a competitor of Amazon because its lock screen ad-supported product is for a smartphone built by Blu, a big rival to Alcatel.
“Essentially they were playing both sides of [the] fence,” Joshua Haffner, an attorney for Haffner Law, which is representing Pay Per Swipe, said of TCT, according to the report. “They had our confidential info, and they were planning out strategies to go with entities other than Amazon, specifically knowing that Blu, their competitor, had a phone and Amazon was doing it. And then all [of a] sudden, they had a deal with Amazon. When did this deal arise?”
The lawsuit also provides more information about Amazon’s announcement last week that is expanding the phone program to include unlocked phones from Alcatel A30 and Moto G5 Plus, noted the report. Pay Per Swipe said in the lawsuit that Amazon and Alcatel will make 500,000 phones to be sold on Amazon, with Amazon ads on the lock screens. The deal is for around $50 million. Pay Per Swipe wants damages from TCT for breaking the non-disclosure and a piece of the proceeds from TCT’s deal with Amazon.