Yelp vs. Google: San Francisco Antitrust Court Battle

San Francisco —

For years, Yelp has complained about Google’s practices, alleging that the tech giant ranked its products higher than those of its competitors in Google search results.

Yelp claims that when a customer searches for “restaurants in Brooklyn,” for example, Google prioritizes displaying its own summary and ratings over unsponsored results from competitors, including Yelp, resulting in fewer customer visits and lower ad revenue for the business.

The San Francisco-based crowd-sourced customer review company has now taken its complaints to court in a closely watched federal lawsuit that’s causing a stir in Silicon Valley.

In a lawsuit filed this week, Yelp accuses Google of violating U.S. antitrust laws by stealing information from Yelp’s website and passing it off as Google’s. The complaint also accuses Google of tweaking its algorithm to drive customers away from Yelp.

“Google’s conduct harmed Yelp by reducing its traffic, reducing its advertising revenue, increasing Yelp’s costs, and exacerbating its network effects through reduced new and returning users,” Yelp said in its lawsuit.

Google has dismissed the allegations as unfounded, noting that in 2013 the Federal Trade Commission found that Google had not broken antitrust law or harmed consumers.

“Google will vigorously defend itself against Yelp’s meritless claims,” the company said in a statement.

Legal experts said the lawsuit could be the first of several legal claims against Google, the Mountain View-based tech giant that has come under increasing scrutiny for its business practices. It comes weeks after a federal judge ruled that Google violated antitrust laws and has a monopoly on internet search engines, paving the way for Yelp and potentially other companies to sue Google for antitrust practices.

“This decision was really groundbreaking in antitrust law,” Aaron Schur, Yelp’s general counsel, said in an interview. “We thought it was a very strong foundation for arguing in court that Google, this illegal monopoly in general search, is actually abusing that monopoly to also dominate the local search market and the local search advertising market through self-aggrandizement.”

The ruling earlier this month by U.S. District Judge Amit Mehta marked a significant shift in the interpretation of U.S. antitrust law, which has traditionally been applied to large oil and railroad companies over concerns that those companies would grow so large that it would affect prices for consumers.

“Since the turn of the century, people have been reluctant to bring these types of lawsuits because of the state of antitrust law, and there was no cost involved,” said John Shaeffer, a partner at the law firm Fox Rothschild.

Google announced that it will appeal the ruling.

Still, Mehta’s decision could pave the way for other companies to file lawsuits against Google, especially if Yelp wins, some legal experts say.

“It certainly opens the door for other people who are in a similar situation or who just say they’ve been wronged by Google and its monopolistic behavior,” said Carl Tobias, a law professor at the University of Richmond.

Google said that “Yelp’s claims are not new,” pointing out that the San Francisco-based company made similar claims several years ago, and said its search results help businesses by generating more than 3 billion clicks to websites each month.

According to the Wall Street Journal, in 2013, the Federal Trade Commission (FTC) found no antitrust violations by Google after a 19-month investigation. However, leaked documents since then reveal that some FTC employees urged the commission to sue Google for some of the company’s practices.

Yelp has also been the subject of FTC investigations that have not resulted in any action being taken against the company. Google has also tried to acquire Yelp in the past.

The U.S. Department of Justice has filed antitrust lawsuits against Apple and Google this year and against Amazon in 2021 as concerns grow about their presence in the industry and limiting consumer choice.

State lawmakers unsuccessfully pushed for legislation that would have required companies like Google that sell ads with news content to pay news publishers. A settlement was later negotiated in which Google would pay about $173 million over five years, which would go to journalism outlets and an AI accelerator program.

“We’ve really seen a shift in the political climate and a growing awareness that antitrust is really important to everyone,” said David Segal, vice president of public policy at Yelp.

Yelp’s lawsuit could ultimately go to the Supreme Court.

“I don’t think they filed this to get a payout,” said Bryan Sullivan, founding partner of the law firm Early Sullivan Wright Gizer & McRae. “I think they filed this to prove a point and try to change the situation.”

Times analyst Scott Wilson contributed to this report.