It may be months, if not over a year before we see some real change happen after Google’s massive antitrust ruling that happened in August. The company has been deemed a search monopoly in one of the biggest antitrust cases of this day and age. However, just weeks after the ruling, Yelp is now suing Google over basically the same practices.
This case is still in its early stages, so there’s still a bunch of information that we’re waiting on. Depending on how large of a case this is, it could be a couple of months before we get an official ruling.
Google’s looming changes
In case you’re in the dark about the aforementioned antitrust ruling, the court considers the company an illegal search monopoly. It gets more than 90% of the search traffic across the internet with its biggest competitor, Microsoft’s Bing, snagging only 3%.
The company has been throwing its weight (and money) around to maintain its hold on the search market. For example, Google paid $26 billion to be the default search engine on iPhones back in 2021. This also goes along with claims that Google manipulates its algorithm to favor its own services and stifle companies that offer similar services.
At this point in time, we don’t know what the government is going to do with the company. We won’t know for quite some time, so we’re going to need to hang tight.
Yelp is suing Google after its large antitrust loss
Yelp is one of the many companies that rely on ad revenue from Google search results. It’s a pretty big company, but at the end of the day, it lives and dies by Google.
On Wednesday, it filed a 66-page lawsuit against Google claiming that the search giant has been unfairly favoring its own local services and leaving competing platforms with diminished traffic. While Yelp has been vocal about its distaste for Google’s practices, it’s been hesitant to file a lawsuit until now. One reason is because of the amount of money and time it would require. Google is a much larger company, so it has the money to postpone a lawsuit while the opposing side runs out of money.
Not only that but Yelp used the momentum from the major antitrust ruling to propel its lawsuit. “the winds on antitrust have shifted dramatically,” Yelp’s CEO, Jeremy Stoppelman told The New York Times.
Stoppelman wrote an extensive blog post pinning Google to the wall about its practices. “…Google abuses its monopoly power in general search to keep users within Google’s owned ecosystem and prevents them from going to rival sites,” the blog post stated.
When you do a search for a local place on Google, sure, you’ll see results from other sites, but before you see them, you’ll see information about it served by Google first. This includes hours of operation, location, directions, and reviews. All of this information is provided by Google, and it keeps people on its site and away from others. Websites only gain ad revenue when someone actually goes to their site. However, since you can see all of the information you need on Google’s home page, there’s not much need for you to visit other sites.
Traffic jam
“Google has so effectively self-preferenced its offerings that an increasing volume of searches result in zero clicks,” the blog post stated. This is the same effect that Google’s AI Overviews have on most sites on the platform. Stoppelman referenced an arXiv report from 2023 about the impacts of SERPs (search engine
results pages) on organic click-through rates.
The blog post goes on to say that 30% of the people who do eventually click on Yelp’s links wind eventually wind up going to another Google site. “This anticompetitive conduct siphons traffic and advertising revenue from vertical search services, like Yelp, that provide objectively higher quality local business content for consumers.”
This extends past Yelp, as there are other companies that offer local search results. Companies like Zillow offer local search results and other relevant information. The same thing goes for companies like Expedia. However, as Google’s own local search platform has expanded over the years, it’s taking the user’s attention away from dedicated companies.
Lower-quality product
In its case, Yelp remarks that Google is providing users with an inferior product when people use its platform. Yelp has been offering reviews on local places for longer than Google, so it, ostensibly, offers a better-quality product.
For example, according to a report cited by the FTC, about 32% of the reviews on Google have no text. This means that anyone could simply place a meaningless star review without explaining why they gave that rating. Yelp, on the other hand, requires that every review be accompanied by text.
Yelp is a company that specializes in being a review site, so all of its resources go toward creating the best and most comprehensive experience. Google, on the other hand, doesn’t. So, we don’t know how much attention the company actually pays to make its review platform quality.
Google’s response
Companies like CNN reached out to Google for comment, but the company hasn’t responded directly. However, a Google Spokesperson did offer a statement. “Yelp’s claims are not new,” Google Spokesperson Peter Schottenfels said, “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 will vigorously defend against Yelp’s meritless claims.”
Obviously, Google’s going to fight this. In another statement, the company said that it was going to appeal this claim. Also, and this might sound cocky on the company’s part, the statement mentions an argument that the company is the reason why people prefer to use Google over the competition. It sounds like Google’s saying that people navigate to Google, not because of any anti-competition practices, but because it just offers a better experience.
However, Google holds the reins on its own search engine. When you do a local search, you see Google’s platform first and foremost. When you tap on a result, you’ll see all of the information you need to know about the location. The company is putting its own results above the competition. On mobile, it’s not uncommon for Google’s results to take up the entire first screen. Third-party companies don’t often have a chance to cross the consumer’s eyes.
Yelp’s demands
These companies are going to battle it out in the courtroom, and we’ll know the results down the road. As for Google’s slap on the wrist, Yelp demands monetary compensation. Also, the company wants an “injunction prohibiting Google from continuing to engage in the anticompetitive practices.”
We don’t know what monetary damages Yelp is demanding, but we expect them to be a drop in the bucket for Google.
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