Yelp has filing an antitrust lawsuit that accuses Google for leveraging its monopoly power to dominate local search and advertising markets. Google dominates the general search market with a 90% share. This monopoly has been maintained through multi-billion dollar agreements with browser makers, device manufacturers and cellular carriers.
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In August 2024, a federal judge ruled that Google had violated US antitrust laws concerning its search business. This ruling was issued by US District Judge Amit Mehta labeled Google as a monopolist. This decision opened the door for other tech companies like Yelp to pursue legal action against Google.
The company has been a critic of Google’s business practices for years. The company’s grievances began when Google allegedly started to stifle Yelp’s reach after Yelp declined a buyout offer from Google.
The company claims that Google’s actions have impacted its business leading to reduced traffic, lower advertising revenues and increased operational costs.
A huge portion of daily Google searches on mobile have local intent. Yelp argues that Google manipulates these search results to prioritize its own local search offerings even when they are of inferior quality compared to those of competitors.
This manipulation often leads to zero-click searches, where users find all the information they need on Google’s search results page without clicking through to other sites.
When clicks do occur, 30% are directed to other Google properties.
In 2009, Google was caught scraping reviews from Yelp and other local search services, misrepresenting this content as its own. This practice only ceased after a 2011 investigation by the FTC.
Google continues to struggle with the quality of its local search content. 32% of Google’s so-called reviews are star ratings without accompanying text, a practice that diminishes the credibility of the overall review count.
The company contends that consumers are trapped in Google’s walled garden of subpar content with studies consistently showing a preference for search results that include third-party content.
By keeping users within its ecosystem Google prevents competitors from scaling. This lack of competition reduces Google’s incentive to improve the quality of its content leading to a degraded consumer experience.
Advertisers are also harmed by Google’s practices. The suppression of competition in the local search advertising market forces more local advertisers to rely on Google allowing the company to charge higher fees with little competitive pressure.
Over the past decade Google has increased its search advertising revenue by 20% or more each year.
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In 2017, the European Commission fined Google $2.6 billion for favoring its own shopping recommendations over those of competitors.
The Commission is currently investigating Google’s self-preferencing in search results under the Digital Markets Act.
Similar findings have emerged in Turkey, where the competition authority determined that Google had unlawfully prioritized its local search results.
The company accuses Google of manipulating search engine results to favor its own local search services over those of competitors like Yelp.
According to the lawsuit, when users search for local businesses, Google prioritizes its own services such as Google Maps and Google Reviews over external sources like Yelp, thus reducing the visibility and accessibility of competing platforms.
By directing users towards its own services, Google allegedly prevents rival platforms from gaining traction, reaching customers and achieving the scale necessary to compete effectively.
This has implications for other specialized search providers including travel sites like Expedia, job platforms like Glassdoor and real estate websites like Zillow, which Yelp cites as being similarly disadvantaged.
The company also highlights the disparity in the quality of reviews between its platform and Google’s. The lawsuit cites a Federal Trade Commission report indicating that 32% of reviews on Google lack textual content, whereas Yelp requires detailed text in all reviews.
The company’s lawsuit claims that Google’s monopoly extends to the local search advertising market, where it allegedly charges higher fees due to its position.
By suppressing competition Google can extract more from advertisers, who have limited alternatives. The company contends that this has led to inflated advertising costs and has allowed Google to increase its search advertising revenue by 20%.
Google has denied Yelp’s allegations labeling them as meritless and pointing out that similar claims have been dismissed in the past by the FTC and in the Department of Justice’s antitrust case against Google.
The company has a history of challenging Google’s business practices. The company has previously filed complaints in the European Union and testified before the US Senate in 2020 regarding its concerns over Google’s dominance in the search market.
The company has consistently advocated for stricter enforcement of antitrust laws to curb Google’s alleged self-preferencing and to promote a more competitive digital marketplace.
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