AppLovin sues Unity over alleged collection and use of mobile advertising data

The rivalry between AppLovin and Unity has moved into a legal dispute over advertising data, with AppLovin seeking to restrict its competitor from collecting and using information generated through its mobile advertising business.

As first reported by Digiday, AppLovin has asked the Superior Court of California in San Francisco for a temporary restraining order against Unity, alleging that Unity’s Ad Quality SDK improperly collects data associated with ads served through AppLovin’s advertising technology.

The court action accompanies a separate JAMS arbitration initiated by AppLovin and marks an escalation between two companies that compete across mobile advertising, app monetization and user acquisition.

At the center of the dispute is Unity’s Ad Quality product, a tool designed to help mobile game publishers monitor the advertising experiences appearing inside their apps.

AppLovin alleges that the SDK has collected information relating to advertisements AppLovin wins and serves, including details about ad creatives, users and devices, impression revenue and engagement.

The company also claims Unity has obtained information generated through AppLovin’s advertising auctions, including clearing prices, auction and impression identifiers and details about its mediation waterfall.

AppLovin refers to the information covered by its complaint as “Protected Data.”

The dispute extends beyond whether Unity has access to the information. AppLovin alleges that Unity has used data generated through its advertising business to improve models that compete against AppLovin in mobile ad auctions.

According to Digiday, AppLovin alleges “on information and belief” that Unity has used AppLovin-generated data to train models and model its advertising decisions. The allegations have not been adjudicated.

Mediation requests processed by AppLovin can contain a range of device and user-related signals, including device settings and other information associated with an ad request. The dispute raises a broader question about how advertising data accessible within mobile apps can be used by competing ad tech providers.

AppLovin is asking the court to prevent Unity from collecting, extracting, using or disclosing the data covered by its definition of Protected Data while the arbitration proceeds.

The requested order would also require Unity to disable the relevant data collection within five business days and modify its Ad Quality SDK within 30 days.

The proposed restrictions would not prevent Unity from collecting information associated with ads that Unity itself wins and serves.

Unity has rejected AppLovin’s characterization of its practices and argues that the lawsuit is an attempt by a larger competitor to respond to increased competition.

In a statement provided to Digiday, a Unity spokesperson described AppLovin’s filings as an effort by a “dominant incumbent” to use litigation in response to Unity’s improving competitive position.

Unity said Ad Quality is a free product intended to help game developers prevent inappropriate or harmful advertising from appearing in their titles. The company also said customers choose to share data through the product.

Unity further disputed AppLovin’s contention that Ad Quality is responsible for improvements in its advertising performance.

The disagreement is also moving through private arbitration.

AppLovin’s arbitration claims include breach of contract, trade-secret misappropriation, interference with contractual and prospective economic relationships and alleged violations of California’s unfair competition law.

AppLovin argues that temporary court intervention is necessary because the disputed data collection is ongoing and that an eventual arbitration award may not be sufficient to remedy the alleged damage if the practice continues while the case is being considered.

None of those allegations establish that Unity violated the law or AppLovin’s rights. The underlying claims remain subject to the court and arbitration proceedings.

The case also highlights the increasingly complicated data relationships created when competing advertising technologies operate inside the same mobile apps.

Mobile publishers commonly integrate multiple advertising SDKs and mediation technologies to manage demand from different networks. As a result, technologies operated by competing ad platforms can function within the same app environment and potentially encounter information generated by other advertising systems.

AppLovin operates MAX, its mobile ad mediation platform, while Unity competes for advertising demand and operates its own monetization technology.

The companies have also been direct strategic rivals for several years. In 2022, AppLovin proposed an all-stock merger with Unity valued at roughly $20 billion, conditional on Unity abandoning its planned combination with ironSource. Unity rejected the proposal and subsequently completed its merger with ironSource.

The latest dispute shifts that rivalry toward questions about ownership, access and permitted use of advertising data generated when competing technologies interact within the same mobile ecosystem.

For the wider mobile advertising market, the proceedings could draw attention to where the boundaries lie when one ad tech provider’s SDK has visibility into information associated with another provider’s auctions and impressions.

For now, AppLovin is seeking restrictions on Unity’s collection and use of the disputed information while its broader claims proceed through arbitration, while Unity is contesting AppLovin’s allegations and its characterization of the Ad Quality product.