Yelp sues Google for antitrust violations

Yelp alleges that Google has created or preserved its monopoly in local search services by preferencing its own inferior vertical over competitors’, which Yelp says harmed competition and reduced the quality of local search services. Yelp claims that the way Google directs users toward its own local search vertical from its general search engine results page should be considered illegal tying of separate products to keep rivals from reaching scale.

The company was emboldened to bring its own lawsuit against Google after the DOJ’s win in its antitrust case about the company’s allegedly exclusionary practices around the distribution of search services. Yelp CEO Jeremy Stoppelman told The New York Times that following that decision, “the winds on antitrust have shifted dramatically.” Previously, he told the Times, he’d hesitated to bring a suit because of the resources it would require and because he saw it as the government’s job to enforce the antitrust laws.

While US District Court Judge Amit Mehta delivered the government a win in its case against Google, he notably narrowed the suit earlier in litigation. Mehta threw out claims from a group of state attorneys general that Google had acted unfairly by allegedly designing its search result pages to lower the visibility of specialized search engines like Yelp and TripAdvisor.

“Yelp’s claims are not new,” Google spokesperson Peter Schottenfels said in a statement. “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.”

Consumers are the ultimate losers of Google’s allegedly anticompetitive behavior, Yelp says. “By keeping users from leaving Google, other vertical search services are prevented from reaching customers, achieving scale, and building helpful content,” Stoppelman wrote in a blog post. “This softening of the competitive landscape translates to less incentive for Google to invest in quality content that would improve the consumer experience, and greater incentives to show less relevant but nevertheless monetizable results.”

It also hurts advertisers, according to Yelp, since suppressing competition for local search leads more local advertisers to Google. “As a result, Google can extract higher fees from advertisers with little consequence, according to studies,” Stoppelman wrote. “Notably, Google has increased its year-over-year search advertising revenue by 20% or more each year for the better part of the last decade, while still being able to increase its market share.”