Google CEO Sundar Pichai
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The government’s antitrust victory over Google has cleared the way for a lawsuit against the company from Yelp, a competing online service that lets users find and review local businesses.
In a lawsuit filed on Wednesday in federal court in San Francisco, Yelp accuses Google of leveraging its monopoly power in general search to divert people away from local search providers and toward its own offerings. It seeks a court order blocking Google from further engaging in anticompetitive conduct, as well as unspecified monetary damages.
The filing of the complaint follows a federal judge earlier this month finding that the tech giant violated antitrust laws by building a moat around its monopoly over search through anticompetitive agreements, such as exclusive deals with Apple and Samsung to have Google as the default search engine on their phones and browsers. The decision is expected to have ripple effects across the digital ad market, with hearings scheduled to start in September that will consider remedies, which could include breaking up the company.
In that case, U.S. District Judge Amit Mehta concluded that Google owns roughly 89 percent of the general search market. This, he said, effectively makes it the “gateway” to the internet. Each day, an estimated 9 billion searches are performed on the platform.
Yelp, which Google attempted to acquire in 2009, is believed to be among the first companies to hold up that decision to bring an antitrust lawsuit of its own. It’s long raised complaints to regulators and lawmakers of what it perceives as anticompetitive conduct from Google, including scraping content from rivals.
In a blog post, Yelp chief executive Jeremy Stoppelman stressed that Google exempts itself from the ranking system it uses for other sites. “When a consumer conducts a Google search with local intent, Google manipulates its results to promote its own local search offerings above those of its rivals, regardless of the comparative poorer quality of its own properties,” he said.
The lawsuit targets Google placing its search results for local businesses above Yelp’s. When users ask about nearby restaurants, for example, they’re shown Google’s sponsored businesses at the top of the page directly above a Google map of others. Competitors vie for space below.
This self-preferencing has led to an increasing volume of searches resulting in zero clicks, meaning that several users never leave Google’s search results page, Yelp alleges. And even when it does result in a click elsewhere, roughly 30 percent are led to another Google property, according to the complaint.
“Google abuses its monopoly power in general search to keep users within Google’s owned ecosystem and prevents them from going to rival sites,” Stoppelman wrote. “This anticompetitive conduct siphons traffic and advertising revenue from vertical search services, like Yelp, that provide objectively higher quality local business content for consumers.”
The majority of Yelp’s revenue is derived from selling local search advertising in competition with Google and other providers. Companies that similarly function as specialized search providers include Expedia for travel, Glassdoor for jobs and Zillow for real estate, among others. Consumers often use Google as a general search gateway to access these platforms.
Yelp brings claims for violations of section two of the Sherman Act over allegations related to monopolizing the local search services and advertising markets, as well as California’s unfair competition law.
