Yelp files antitrust suit against Google over local search practices (Update: Yelp counter-response)

Update: August 29, 2024 (07:43 PM ET): Yelp is unsurprisingly not super happy with Google’s response to its lawsuit. We just got a counter-response from Yelp General Counsel Aaron Schur, who attempts to highlight how the company’s case differs from earlier actions pursued against Google:

Google’s statement is misleading. Yelp’s claims have never been pursued in court, let alone thrown out. In 2023, in the government’s antitrust case, Judge Mehta ruled there was a lack of evidence that Google’s degradation of specialized vertical providers, like Yelp, had an anticompetitive effect in general search — but Yelp is not a competitor in the general search market. Yelp’s complaint explains how Google harms competition in the local search and local search advertising markets, including through self-preferencing its own lower-quality offerings and exclusive billion-dollar deals with web browsers and device makers.

Schur goes on to add:

The FTC’s 2011 investigation focused on Google’s anticompetitive conduct in different search verticals. The FTC closed its inquiry in early 2013 without filing suit, although a later leaked FTC staff memo made clear that FTC staff had recommended legal action. We disagreed with that decision over a decade ago not to take legal action, which has subsequently been highly criticized and emboldened Google to further engage in anticompetitive conduct, including siphoning users towards its own lower-quality content and away from Yelp and others – to the detriment of consumers, competition and advertisers.

Update: August 28, 2024 (09:05 PM ET): Google has responded to our request for comment. The company characterizes Yelp’s accusations as not meaningfully distinct from the sort of antitrust charges it has successfully defended itself against in the past. A spokesperson explains:

Yelp’s claims are not new. 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.

Original post: August 28, 2024 (07:40 PM ET): Sometimes you have to wonder if Google’s legal department has an erasable sign up on the wall: It has been [_] days since the last antitrust suit against Google. We’d also wonder if that number ever gets to triple digits, as it feels like the company can’t go more than a couple months without being hit with the latest allegations of unfair business practices. Now the most recent action to be taken against the search heavyweight is just the latest development in a saga dating back over 15 years, as Yelp accuses Google of monopolistic practices.

Yelp and Google used to be partners, with the latter licensing the former’s reviews. After that arrangement ended, you might remember that Google even tried to acquire Yelp. But that deal never came to pass, and not long after, the relationship really started to sour, with Yelp accusing Google of scraping its content without permission. This was still ten years ago, and Google Search has evolved a lot in the time since, with both a whole lot greater emphasis on local content, and giving users the results they’re looking for right on Google itself — and far less clicking through to sites like Yelp.

That’s the problem at the core of Yelp’s new suit against Google, filed today in federal court in San Francisco. Search for reviews today, and while you will likely see Yelp pretty high in Google’s results, it often feels like all those off-Google results are dwarfed by the company’s own knowledge panels or business profiles. And with those containing the same sort of user reviews that Yelp offers — but here, one click closer — visitors may feel that much less inclined to keep digging.

As a consequence of this, Yelp feels that it’s losing out on ad dollars that are now being spent directly with Google. As for what kind of resolution it’s looking for, the company is in favor of an effort called Focus on the User, which promotes the idea that Google should surface the highest-quality results for any given query. That sounds reasonable on its face, but the more you think about it, the more mired in subjectivity and problematic it feels.

Still, this is one fight that’s been a long time coming, and it seems clear that something needs to give. Whether that’s going to mean Yelp needing to make drastic changes to its business model, or Google overhauling the look of Search once again, we don’t yet know. As of today, anyway, the fate of both companies may be in the court’s hands.

We’ve reached out to Google for comment on this legal action, and will update you with any response we get.