Yelp Inc.
What Happened: Yelp accuses Google of maintaining its monopoly in local search services by favoring its vertical over competitors'. This, according to Yelp, has harmed competition and degraded the quality of local search services.
The lawsuit, filed in the Northern District of California, demands that Google cease its allegedly anticompetitive conduct and seeks damages. Yelp has requested a jury trial.
"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. 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," the court filing said.
Yelp's CEO, Jeremy Stoppelman, told The New York Times that the recent United States Department of Justice victory against Google's exclusionary practices emboldened Yelp to file the lawsuit. Stoppelman noted a significant shift in antitrust enforcement.
Google spokesperson Peter Schottenfels dismissed Yelp's claims as "not new," stating that similar claims were previously rejected by the Federal Trade Commission and a judge in the DOJ's case, the report said.
Yelp argues that Google's behavior ultimately harms consumers and advertisers by stifling competition and allowing Google to charge higher fees with minimal consequences.
"With our action, we aim to safeguard competition, protect consumer choice, recover damages, and prevent Google from engaging in anticompetitive practices so that innovation may flourish," Stoppelman said in a blog post.
Why It Matters: The lawsuit comes on the heels of a landmark ruling where a federal judge found Google guilty of monopolistic practices in the search engine market. The ruling, which determined that Google's payments to make its search engine the default on smartphones violated antitrust laws, has set a precedent for other tech giants.
However, legal experts are divided on whether this ruling will impact ongoing antitrust cases against other major companies like Apple Inc.
Despite the ruling, analysts like Wedbush's Dan Ives suggest that a breakup of major tech companies is highly unlikely. However, regulatory scrutiny is expected to increase, potentially leading to significant changes in business practices.
