Yelp Sues Google for Antitrust Abuses

Now that Google Search is an illegal monopoly in the United States, the vultures are circling. First up is online reviews service Yelp, which filed a new antitrust lawsuit against the search giant, alleging that it abused its market dominance to keep consumers from discovering Yelp’s offering.

“This is a case about Google, the largest information gatekeeper in existence, abandoning its stated mission to deliver the best information available to its consumers and instead forcing its own low-quality local search content on them,” the Yelp filing reads. “Google’s scheme prevents businesses from reaching customers without paying Google and starves competitors of the traffic and revenues that would allow them to achieve scale and pose a competitive constraint on Google’s conduct.”

Yelp has complained about Google’s business practices for over a decade, but this is the first time the company filed a formal lawsuit. According to the company, Google purposefully degrades search quality and demotes rivals to maintain its market dominance. It also engages in a behavior called self-preferencing, Yelp says, in which Google promotes its own “lower quality content” over that from rivals, “diminishing consumer choice.”

“Rather than compete on the merits with companies like Yelp, Google has so effectively self-preferenced its offerings that an increasing volume of searches result in zero clicks, meaning users never leave Google’s search results page,” Yelp co-founder and CEO Jeremy Stoppleman explains. “And even when searches do result in a click, 30 percent of those go to another Google property. In other words, Google abuses its monopoly power in general search to keep users within Google’s owned ecosystem and prevents them from going to rival sites.”

Yelp alleges that Google began scraping its content in 2009 after a failed bid to buy the company, stopping only when a U.S. Federal Trade Commission (FTC) investigation into Google’s business practices “condemned” this behavior. But now that Google has been found guilty of several antitrust abuses in the U.S., EU, and elsewhere, the firm felt that the timing was right to take the next obvious step.

“The recent landmark decision in U.S. v. Google unequivocally found that Google willfully used illegal means to maintain its monopoly in the general search market,” a Yelp statement notes. “This decision is a watershed moment in antitrust law, and we see it as a strong foundation for the case Yelp has brought against Google to address its anticompetitive behavior in the local search and local search advertising markets.”

“Yelp’s claims are not new,” a Google statement notes, which is true enough. “On the other aspects of the decision to which Yelp refers, we are appealing. Google will vigorously defend against Yelp’s meritless claims.”