For years, Yelp has complained about Google’s practices, alleging that the tech giant placed its own products above competitors in Google search results.
Yelp says when a customer searches, say, for “restaurants in Brooklyn,” Google prioritizes putting its own summary and ratings above non-sponsored results from rivals including Yelp, resulting in fewer customer visits and ad revenue for its business.
The San Francisco company that crowd-sources customer reviews is now taking its complaints to court in a closely watched federal lawsuit that is causing waves in Silicon Valley.
In a lawsuit filed last week, Yelp accuses Google of violating U.S. antitrust laws, stealing information from Yelp’s website and passing it off as coming from Google. The complaint also alleges Google tweaks its algorithm to steer customers away from Yelp.
“Google’s conduct has injured Yelp through lower traffic, reduced advertising revenues, raising Yelp’s own costs, and impaired network effects that come with fewer new and returning users,” Yelp said in its lawsuit.
Google has dismissed the claims as baseless and noted that in 2013 the Federal Trade Commission found that Google did not break antitrust law or harm consumers.
“Google will vigorously defend against Yelp’s meritless claims,” the company said in a statement.
Legal experts said the lawsuit could be the first of several legal claims against Google, the Mountain View, California, technology giant that is facing growing scrutiny over its business practices. It comes weeks after a federal judge ruled Google violated antitrust laws and is a monopolist on web searches, paving the way for Yelp and potentially other companies to sue Google for antitrust practices.
“That decision was really groundbreaking in the antitrust law,” Aaron Schur, Yelp’s general counsel, said in an interview. “We saw it as a very strong foundation, to be able to argue to a court that Google, this illegal monopolist in general search, is actually abusing that monopoly to also dominate a local search market and a local search advertising market through self-preferencing.”
The ruling earlier this month by U.S. District Judge Amit Mehta marked a notable shift in the interpretation of U.S. antitrust law, which historically has been used to address big oil and railroad companies, with the concern that those companies would grow so large that it would affect prices for consumers.
“Since the turn of the century, people have been reluctant to bring these types of suits because of where antitrust law was at the time, because there’s no price associated with this,” said John Shaeffer, a partner at law firm Fox Rothschild.
Google said it would appeal the ruling.
Still, Mehta’s decision could help pave the way for other businesses to bring lawsuits against Google, especially if Yelp wins, some legal experts said.
“It certainly opens this up for others similarly situated or just making the argument that they’ve been harmed by Google and its monopolistic behavior,” said Carl Tobias, a law professor at University of Richmond.
Google said “Yelp’s claims are not new,” pointing out the San Francisco business brought up similar claims years ago, and said that its search results help businesses, driving more than 3 billion website clicks every month.
Although the FTC in 2013 did not find Google violated antitrust law after a 19-month investigation, documents that have leaked since then revealed that some FTC staff members had urged the commission to sue Google over some of its practices, according to the Wall Street Journal.
Yelp has also been subjected to investigations from the FTC that resulted in no action taken on the company. Google has tried to acquire Yelp in the past.
The U.S. Justice Department filed antitrust lawsuits against Apple and Google this year and against Amazon in 2021, as concerns have grown over their footprint in the industry and limiting of consumer choice.
State legislators unsuccessfully pushed a bill that would have required companies like Google, which sell advertising alongside news content, to pay news publishers. A settlement was later negotiated under which Google would pay about $173 million over five years that would go to journalism outlets and an AI accelerator program.
“We’ve really seen a swing in the political climate and the understanding of antitrust as being truly important to everyone,” Schur said.
Yelp’s lawsuit could ultimately end up at the Supreme Court.
“I don’t think they filed this in order to get a payday,” said Bryan Sullivan, a founding partner at law firm Early Sullivan Wright Gizer & McRae. “I think they filed this to make a point and to try to change the landscape.”
