As if Google didn’t have enough on its plate with the DOJ antitrust lawsuit, Yelp decided to sue the company too. On August 28, 2024, Yelp filed a lawsuit against the search giant. It’s not difficult to guess why, of course. Yelp alleges that Google used its dominance in order to get a great, unfair advantage in local search services. That’s the area in which Yelp usually shines, as it provides crowd-sourced reviews about businesses. In this article, we’ll do our best to give you more information about the lawsuit and also provide updates once they’re available.
What exactly is the lawsuit about?
Yelp says that Google created and preserved its monopoly in local search services. How? Well, it’s alleged that it’s preferencing its own inferior vertical over competitors’, said the company. That, in turn, hurt not only Yelp but various other competitors. Yelp also alleges that the way Google directs users towards its solutions from the general search engine results page should be considered illegal. This is preventing its rivals from properly competing, Yelp has said.
More about Yelp
For those of you out of the loop, Yelp is a US-based company that develops the Yelp.com website and mobile app. This service is all about crowd-sourced reviews about businesses. Many of you probably know Yelp as a source for restaurant reviews, but that’s not the sole focus of the service, not at all, even though it does have a table reservation service too. Yelp offers recommendations of the best restaurants, shopping, nightlife, food, entertainment, things to do, services, and more.
The company was founded back in October 2004, so almost 20 years ago. It was founded in San Francisco by former PayPal employees Russel Simmons and Jeremy Stoppelman. At the very end of last year, the company said that approximately 287 million reviews had been contributed to the service. In 2023, the company had over 36 million dekstop unique visitors and over 60 million mobile web unique visitors.
What does Yelp want to achieve with this lawsuit?
Yelp is asking the court to get Google to stop this allegedly anticompetitive behavior and pay damages too. Furthermore, the company is demanding a jury trial for this case. The lawsuit was filed in the Northern District of California, in case you were wondering. That is the same area where Google was found guilty of having an illegal monopoly through its app store as a result of a fight with Epic Games.
What did Yelp & Google say?
Yelp’s CEO said the following: “When a consumer conducts a Google search with local intent, Google manipulates its results to promote its own local search offerings above those of its rivals, regardless of the comparative poorer quality of its own properties”. He also added: “This anticompetitive conduct siphons traffic and advertising revenue from vertical search services”.
Google spokesperson, Peter Schottenfels, said the following: “Yelp’s claims are not new”, while adding: “Similar claims were thrown out years ago by the FTC, and recently by the judge in the DOJ’s case. On the other aspects of the decision to which Yelp refers, we are appealing. Google will vigorously defend against Yelp’s meritless claims”.
This is not the first time Yelp is accusing Google of unfair practices
Yelp and Google have a history in this sphere, actually. Way back in 2011, Jeremy Stoppelman testified in Washington, saying that Google was taking Yelp’s content without giving proper credit.
Google also wanted to acquire Yelp
If you thought that the 2011 incident was the only piece of history between these two companies, well, you could not be more wrong. Something rather important happened back in 2009. Back then, Google actually wanted to acquire Yelp, but the company rejected the offer. Google wanted to acquire the company for $550 million back then.
Yelp believes consumers are suffering because of the situation
Yelp’s CEO had more to add. He said that the consumers are basically the ultimate losers in the whole ordeal. He said: “By keeping users from leaving Google, other vertical search services are prevented from reaching customers, achieving scale, and building helpful content”. Steppelman also added the following: “This softening of the competitive landscape translates to less incentive for Google to invest in quality content that would improve the consumer experience, and greater incentives to show less relevant but nevertheless monetizable results”.
Yelp also said that such practices are hurting advertisers. The company says that since Google started suppressing the competition, it is getting more advertisers too. As a result of that, “Google can extract higher fees from advertisers with little consequence, according to studies”, Stoppelman said.
What’s next?
We’re waiting for the decision from the court. Yelp asked for a trial with a jury present. It remains to be seen if a trial will happen at all. The lawsuit could end up being dismissed, but that’s not as likely. Google may have to go through yet another trial, though it remains to be seen if it will be with a jury or without one. We still don’t know when the decision will be made, so stay tuned for that. We will keep updating this article with new information. As a side note, Google has another trial to worry about, as the DoJ trial against Google’s ad tech has kicked off.
2024-09-11 15:09:32