Los Angeles-based Pay Per Swipe filed a lawsuit against its former partner TCT Mobile over a deal with Amazon, alleging that the defendant cheated it out of profits from Amazon's program that offers deep discounts on smartphones to Prime members and is currently offering ad-subsidized Alcatel smartphones related to the case. The lawsuit was filed in California last week as the plaintiffs believe the TCL-owned firm violated a non-disclosure agreement (NDA) and used information on lock screen ad solutions the two companies have been developing to promote its own goals. Pay Per Swipe is hence suing TCT Mobile for unfair business practices and breach of contract and is seeking damages for the alleged NDA violation, as well as a percentage of TCT's new deal with Amazon that the company claims wouldn't have happened without their former partnership. The developer of lock screen ads is only suing TCT Mobile and not Amazon as it apparently doesn't believe the eCommerce giant was aware of the irregularities that preceded its deal with the Irvine, California-based subsidiary of TCL, the company that currently manufactures Alcatel-branded devices it licenses from Nokia.
According to the lawsuit, TCT Mobile was double-dealing with Pay Per Swipe and Amazon for a considerable period as the firm collaborated with the plaintiff to develop a product strategy before producing a deal with Amazon while simultaneously cutting off Pay Per Swipe. The case filed with a court in Los Angeles also reveals some details regarding the ad-subsidized Alcatel A30 that Amazon announced on Friday as the eCommerce giant and Alcatel are reportedly looking to manufacture 500,000 units of the device as part of a deal worth approximately $50 million.
The NDA that TCT Mobile allegedly breached was signed last September, while Pay Par Swipe found out about its deal with Amazon this February. A legal representative of the Los Angeles-based company questioned the timing of the partnership, wondering for how long was TCT Mobile dealing behind Pay Per Swipe's back, GeekWire reports. If the case ends in a trial, it will likely take years to be resolved, though it's currently unclear if TCT Mobile is considering an out-of-court settlement. An update on the situation will likely follow later this year.