For Google, when it rains (antitrust lawsuits) it pours.
Yelp has officially taken legal action against Google, accusing the search giant of anticompetitive behavior that stifles competition and limits consumer choice. In a lawsuit filed in federal court in San Francisco, Yelp argues Google is abusing its position in the search market to manipulate search results in favor of its own services, all at the expense of consumers and competitors.
In a blog post by Yelp CEO Jeremy Stoppelman, he says, “Google, the largest information gatekeeper in existence, [is] putting its heavy thumb on the scale to stifle competition and keep consumers within its own walled garden.” He contends Google has “illegally abused its monopoly in general search to dominate the local search and local search advertising markets,” engaging in practices that harm the quality of search results and promote its own services over more deserving competitors.
Why This Matters:
The lawsuit highlights Google’s dominance in the search market, where it controls about 90% of the market share. Yelp alleges Google’s strategies, particularly its prioritization of its own local search offerings, severely disadvantage other companies. Stoppelman explains, “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.” This strategy, according to Yelp, leads to a big decrease in the visibility of other services, with many users never leaving Google’s ecosystem due to these preferential results.
The blog post really digs into the extent of Google’s control: “When a consumer conducts a Google search with local intent, nearly half of those searches on mobile devices lead users directly to Google properties.”
In response to these allegations, Yelp seeks not only to recover damages but ensure Google is prevented from continuing its alleged anticompetitive practices. The goal, Yelp states, is to “safeguard competition, protect consumer choice, and prevent Google from engaging in anticompetitive practices so that innovation may flourish.”
Experts React:
Adam Kovacevich, founder and CEO of Chamber of Progress, was critical of Yelp’s move.
“It’s basically an attempt to free ride on Judge Mehta’s finding that Google has market power in ‘general search,’” he tweeted, adding that the arguments made in the blog post have already been rejected by federal courts and the FTC.
Our Take:
Another day, another lawsuit for Google—this time focusing on local search, a quietly massive segment of its business. The outcome could significantly impact the search and local marketing industries. Gen AI platforms like Perplexity and OpenAI are also striving to make inroads in local search. Contending with Google in this area has proven challenging, often requiring partnerships with listing companies like Yelp.
