Yelp is suing Google over claims the tech giant violated antitrust laws by using its dominance in internet search to boost its bottom line and crush competition in local markets.
With its website and app, Yelp says it aims to connect consumers to businesses through local search, and to sustain this business, it sells local search advertising.
But the company argues in its lawsuit that because Google also sells advertising in conjunction with search queries, the tech giant is using its monopoly power in general search to divert traffic from local search competitors, like Yelp.
With this method, Yelp argues that a person searching for a local business through Google would access any information about it that they need because of Google's monopoly power, from directions to get there to reviews. Yelp claims this ensures users never reach its own platform in the first place and are instead stuck with Google, which Yelp says is an "inferior" local search product.
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"This is a case about Google, the largest information gatekeeper in existence, abandoning its stated mission to deliver the best information available to its consumers and instead forcing its own low-quality local search content on them," the lawsuit states. "Google's scheme prevents businesses from reaching customers without paying Google and starves competitors of the traffic and revenues that would allow them to achieve scale and pose a competitive constraint on Google’s conduct."
Yelp argues that it once "peacefully coexisted" with Google when the latter was focused on organic search and creating "the best possible general search engine." It alleges that Google even aimed to acquire Yelp for its strength in local markets, but when Yelp declined, Google began a retaliation campaign, stymieing Yelp's ability to reach consumers on its search platform and engaging in "anti-competitive practices." Yelp even claims that Google has stolen information from its website and passed the data off as its own.
Because Google is keeping competitors out of the market, Yelp alleges, the company doesn't have to invest in quality for consumers while still charging higher fees from advertisers. The suit says this allows the tech company to "offer an inferior product to users without consequence" while Yelp sees lower traffic and advertising revenue with higher costs.
Yelp's lawsuit seeks a jury trial, monetary damages and an injunction "prohibiting Google from continuing to engage in the anticompetitive practices."
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The lawsuit comes after a federal judge ruled earlier this month that Google violated federal antitrust laws by illegally maintaining a monopoly over search engines to thwart competition and charge advertisers high amounts, all without investing in the quality of its search engine. The judge said that this was done through Google's exclusive agreements with companies like Apple that set the company's search as default.
In a statement to CNN, Google said Yelp's claims were "not new" and that it would "vigorously defend" itself against the "meritless" allegations. It pointed to the judge's decision that Google was the best search engine as proof for why consumers choose it over competitors, like Yelp.
"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 spokesperson Peter Schottenfel said in the statement.
