Yelp drags Google to court over "illegal monopoly" claims

Yelp has filed an antitrust lawsuit against Google, accusing the search giant of maintaining an illegal monopoly in local search services. This legal action comes hot on the heels of a federal judge’s recent ruling that Google holds an illegal monopoly in the search market.

The lawsuit, filed in the Northern District of California, alleges that Google has created and preserved its monopoly by favoring its own “inferior” local search vertical over competitors like Yelp. According to the complaint, this practice has not only harmed competition but also reduced the quality of local search services available to consumers.

Yelp CEO Jeremy Stoppelman, in a blog post accompanying the lawsuit, didn’t mince words: “By keeping users from leaving Google, other vertical search services are prevented from reaching customers, achieving scale, and building helpful content.” He argued that this stifling of competition ultimately hurts consumers by reducing Google’s incentive to improve its own services.

The timing of Yelp’s lawsuit is no coincidence. The company was emboldened by the Department of Justice’s recent victory in its antitrust case against Google. Stoppelman told The New York Times that “the winds on antitrust have shifted dramatically” following that decision, which seems to have given Yelp the confidence to pursue its own legal action.

Yelp’s lawsuit goes beyond just alleging harm to competitors. It claims that Google’s practices also hurt advertisers by forcing more local businesses to advertise on Google’s platform, allowing the tech giant to charge higher fees with little consequence. Stoppelman pointed out that Google has consistently increased its year-over-year search advertising revenue by 20% or more for much of the last decade while simultaneously growing its market share.

Google, for its part, is not taking these allegations lying down. A company spokesperson, Peter Schottenfels, stated that “Yelp’s claims are not new” and that similar claims have been dismissed in the past by both the Federal Trade Commission and the judge in the DOJ’s case. Google has vowed to “vigorously defend against Yelp’s meritless claims.”

This lawsuit marks a significant escalation in Yelp’s long-standing battle against Google’s alleged anticompetitive practices. The company has been a vocal critic of Google for years, testifying before the Senate, filing complaints in the European Union, and supporting government agencies in their pursuit of antitrust charges against the search giant, as highlighted by The Verge.

As the legal battle unfolds, all eyes will be on the Northern District of California, where Yelp has demanded a jury trial. With the winds of antitrust sentiment shifting, it remains to be seen whether other tech companies will follow Yelp’s lead and take on the Silicon Valley behemoth in court.