Yelp files lawsuit against Google for suspected search monopoly

Yelp has initiated a significant legal battle against Google, alleging that the tech giant engages in monopolistic practices that hinder competition in the local search market. The lawsuit, filed in the Northern District of California, claims that Google has abused its dominant position in general search to unfairly boost its own local search services, thereby disadvantaging competitors like Yelp.

This legal action comes after a recent ruling by U.S. District Judge Amit Mehta, who determined that Google had unlawfully maintained its monopoly in the search engine market. Yelp’s filing expands on this ruling, stating that Google’s actions not only harm competitors but also restrict consumer choices by prioritizing Google’s services in search results.

https://x.com/Yelp/status/1828901826265051230

Yelp’s lawsuit outlines several key allegations against Google. The company accuses Google of engaging in “self-preferencing,” whereby it promotes its local search results above competitors’ results, regardless of quality. Yelp argues that Google’s local listings are often shorter, error-prone, and lack the quality control present in specialized services like Yelp. This, according to Yelp, compels businesses to pay Google for visibility, increasing costs and impeding competitors from expanding.

The lawsuit also highlights Google’s extensive use of exclusive contracts, notably with major players in the mobile industry like Apple, as a tactic to solidify its dominance. As per the complaint, these agreements ensure that Google remains the default search engine for millions of users, further marginalizing rivals. Yelp asserts that this strategy, combined with Google’s control over search advertising, enables the company to charge higher prices to advertisers, squeezing out smaller competitors.

https://x.com/rustybrick/status/1829114523242127715

Yelp’s CEO, Jeremy Stoppelman, has long criticized Google’s practices. The conflict between the two companies dates back to 2009 when Yelp declined a potential acquisition by Google.

In this latest lawsuit, Stoppelman likened Google’s actions to being “both the judge and a competitor in the same Olympic event”, highlighting the alleged unfair advantage Google holds in the market.

In response, Google has refuted Yelp’s claims, deeming them baseless and referring to them as past grievances already addressed by regulators such as the Federal Trade Commission (FTC). A Google spokesperson stated that the company intends to vigorously defend itself against the lawsuit, noting that similar claims have not prevailed in court. Google also plans to challenge parts of Judge Mehta’s ruling mentioned in Yelp’s complaint.

The outcome of this lawsuit could have widespread ramifications for the tech industry, particularly regarding search engine operations and the degree of competition permitted in local search services. As the case progresses, it is expected to serve as a crucial test of U.S. antitrust laws in the digital era, potentially reshaping how consumers engage with online search platforms.