The government’s antitrust victory against Google has paved the way for a lawsuit against the company by Yelp, a competing online service that lets users find and review local businesses.
In a lawsuit filed Wednesday in federal court in San Francisco, Yelp accuses Google of using its monopoly power in general search to drive people away from local search providers and toward its own offerings. It seeks a court order barring Google from engaging in anticompetitive behavior, as well as unspecified monetary damages.
The filing of the complaint follows a federal judge’s ruling earlier this month that the tech giant violated antitrust laws by building a moat around its search monopoly through anticompetitive deals, 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 on the digital advertising market, with hearings scheduled to begin in September that will consider remedies, which could include splitting the company up.
In that case, U.S. District Judge Amit Mehta concluded that Google owns about 89 percent of the overall search market. That, he said, effectively makes it the “gateway” to the Internet. An estimated 9 billion searches are performed on the platform every day.
Yelp, which Google attempted to acquire in 2009, is believed to be one of the first companies to delay that decision to file an antitrust lawsuit. It has long complained to regulators and lawmakers about what it perceives as anticompetitive behavior by Google, including scraping content from rivals.
In a blog post, Yelp CEO Jeremy Stoppelman noted that Google is exempt from the ranking system it uses for other sites. “When a consumer searches on Google with local intent, Google manipulates its results to promote its local search offerings over those of its rivals, regardless of the comparatively poorer quality of its properties,” he said.
The lawsuit targets Google, which ranks its local business search results above Yelp. When users search for nearby restaurants, for example, Google-promoted businesses are shown at the top of the page, directly above a Google Map of other businesses. Competitors are vying for space underneath.
This self-preference has led to a growing volume of zero-click searches, meaning many users never leave the Google search results page, Yelp claims. And even when that does result in a click elsewhere, about 30 percent are directed to another Google property, according to the complaint.
“Google abuses its monopoly power in general search to keep users within Google’s proprietary ecosystem and prevent them from going to rival sites,” Stoppelman wrote. “This anticompetitive conduct takes traffic and advertising revenue away from vertical search services, like Yelp, that provide objectively superior local business content to consumers.”
Yelp gets the majority of its revenue from selling local search advertising in competition with Google and other providers. Companies that function similarly 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 files complaints for violations of Section Two of the Sherman Act in connection with allegations of monopolization of local search services and advertising marketplaces, as well as California’s Unfair Competition Law.