The government’s antitrust victory over Google paved the path for a lawsuit against the corporation by Yelp, a competitor web site that allows users to find and review local businesses.
Yelp claims Google of abusing its dominant power in general search to direct users away from local search providers and toward its own products in a complaint filed on Wednesday in federal court in San Francisco. It seeks a court order to prevent Google from participating in additional anticompetitive behavior, as well as unspecified monetary penalties.
The complaint follows a federal judge’s ruling earlier this month that the tech giant violated antitrust laws by creating a moat around its search monopoly through anticompetitive agreements, such as exclusive deals with Apple and Samsung to make Google the default search engine on their phones and browsers. The ruling is expected to have far-reaching consequences for the digital ad business, with hearings due to begin in September to seek remedies, which could include splitting up the corporation.
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In that lawsuit, U.S. District Judge Amit Mehta determined that Google controls around 89 percent of the whole search industry. This, he claimed, effectively makes it the “gateway” to the Internet. Every day, around 9 billion queries are conducted on the network.
Yelp, which Google wanted to acquire in 2009, is thought to be one of the first companies to challenge the judgment by filing its own antitrust action. It has often complained to regulators and lawmakers about what it sees as anticompetitive behavior from Google, such as scraping content from competitors.
Yelp CEO Jeremy Stoppelman stated in a blog post that Google is excluded from the ranking method it uses for other websites. “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,” stated Mr. Jones.
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The complaint accuses Google of prioritizing its search results for local businesses above Yelp’s. When consumers search for nearby restaurants, for example, Google’s sponsored companies appear at the top of the screen, directly above a Google map of alternative options. Competitors compete for space below.
According to Yelp, this self-preferencing has resulted in an increase in the number of searches with no clicks, implying that many consumers never leave Google’s search results page. Even when it does result in a click elsewhere, approximately 30% are directed to another Google property, according to the lawsuit.
“Google abuses its monopoly power in general search to keep users within Google’s owned ecosystem and prevents them from going to rival sites,” he wrote. “This anticompetitive conduct siphons traffic and advertising revenue from vertical search services, like Yelp, that provide objectively higher quality local business content for consumers.”
Yelp earns the majority of its revenue from selling local search advertising in competition with Google and other suppliers. Expedia, Glassdoor, and Zillow are examples of specialized search services. Consumers frequently use Google as a general search engine to access these platforms.
Yelp is claiming violations of Section 2 of the Sherman Act for allegedly monopolizing the local search services and advertising industries, as well as California’s unfair competition legislation.
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