Yelp has filed an antitrust lawsuit against Google, marking the culmination of years of tension between the two companies. Allegations from Yelp suggest that Google has utilized its dominance in online searches to control local queries and promote its own reviews over competitors.
“Google abuses its monopoly power in general search to keep users within Google’s owned ecosystem and prevent them from visiting rival sites,” stated Yelp Co-founder and CEO Jeremy Stoppelman in a blog post announcing the lawsuit. “This anticompetitive behavior diverts traffic and advertising revenue away from vertical search services like Yelp, which offer superior local business content for consumers.”
Given a recent Department of Justice case ruling Google as a monopolist in search, this US antitrust lawsuit holds significant weight. While the previous ruling did not impose any penalties on Google, it is likely that Yelp’s legal action will be the first of many from competitors of the tech giant.
In a response to a request for comment, a Google spokesperson told Engadget:
“Yelp’s claims are not new. Similar claims were thrown out years ago by the FTC, and recently by the judge in the DOJ’s case. On the other aspects of the decision to which Yelp refers, we are appealing. Google will vigorously defend against Yelp’s meritless claims.”
Although the focus of this lawsuit is on the US market, Yelp has also been vocal about Google’s practices in international markets. The European Digital Markets Act aimed to reduce Google’s control over search results by implementing regulations against tech giants favoring their own services. However, Yelp argued that Google’s compliance with the DMA actually discouraged users from exploring beyond the Google ecosystem.
In a statement regarding the lawsuit, Yelp’s General Counsel Aaron Schur expressed:
“Yelp’s antitrust lawsuit against Google addresses how Google abuses its illegal monopoly in general search to engage in anticompetitive conduct, including self-preferencing its own inferior local product, to dominate the local search and local search advertising markets. For years, Google has leveraged its monopoly in general search to pad its own bottom line at the expense of what’s best for consumers, innovation, and fair competition. By willfully engaging in exclusionary, anticompetitive conduct, Google has driven traffic and revenue away from competitors, made it harder for them to scale, and increased their costs, while degrading consumer choice, to grow its own market power.
Judge Amit Mehta’s recent ruling in the government’s antitrust case against Google, finding Google illegally maintained its monopoly in general search, is a watershed moment in antitrust law, and provides a strong foundation for Yelp’s case against Google. In addition to injunctive relief, Yelp seeks a remedy that ensures Google can no longer self-preference in local search. The harms caused by Google’s self-preferencing are not unique to Yelp, and we look forward to telling our story in court.”
Update, August 28, 8:15PM ET: This story was updated after publish to include a comment from a Google spokesperson and an additional comment from Yelp’s General Counsel.
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Conclusion
As the battle between Yelp and Google unfolds in the legal arena, the implications for the tech industry are significant. The allegations of monopolistic practices and anticompetitive behavior raise questions about the true nature of competition in the digital age. With regulatory scrutiny increasing globally, Google’s dominance in search and its impact on competitors could face further challenges.
Yelp’s decision to take legal action against Google demonstrates a commitment to fair competition and consumer choice. The outcome of this lawsuit will not only have repercussions for these two companies but could also set a precedent for how tech giants operate in the future. As the case progresses, industry observers will be watching closely to see how it shapes the landscape of online search and local business content.
With Google vehemently defending against Yelp’s claims, the legal battle is poised to be contentious and drawn out. Both companies have a lot at stake, and the implications of the court’s decision could reverberate throughout the tech industry. Ultimately, the outcome will have far-reaching effects on how online search engines operate and the level of competition allowed in the market.
