Yelp Inc (NYSE:YELP) has sued Google for stifling competition after a US federal judge ruled earlier this month that the Alphabet Inc (NASDAQ:GOOG) search engine violated antitrust laws.
An antitrust lawsuit filed overnight by the online review company alleging that Google manipulates search results to promote its own local reviews rather than its rivals, such as Yelp.
Jeremy Stoppelman, CEO of the online review company, said in a blog post that Google, "the largest information gatekeeper in existence, putting its heavy thumb on the scale to stifle competition and keep consumers within its own walled garden".
Following the recent court ruling, where Google was labelled a "monopolist" for violating US antitrust law in the online search engine market, Stoppelman said Yelp's legal action aims to "safeguard competition, protect consumer choice, recover damages, and prevent Google from engaging in anticompetitive practices so that innovation may flourish".
The legal filing also cited other specialized 'vertical' search providers (VSPs) that have also been affected by Google's practises, such as Expedia for travel searches, Glassdoor for jobs, Zillow (NASDAQ:Z) for apartment rentals and real estate.
It alleges that on a "level playing field VSPs like Yelp are a threat to Google, which sells advertising in conjunction with search queries, given their ability to siphon traffic (and thus revenue) away from it.
"As such, Google has sought to create and steadily expand its own foothold in the local search market so that it can sell more of its own advertising, as opposed to sending consumers to Yelp (or any other local search providers), however much Google’s own organic algorithm suggests the match."
Yelp claims that it initially coexisted peacefully with Google, even licensing its content to the search giant.
Google made an acquisition attempt of Yelp in 2009, which was rebuffed.
Following this, Yelp alleges that Google began a campaign to undermine its ability to reach consumers through its search platform.
Yelp accuses Google of engaging in various anti-competitive practices, such as stealing Yelp’s content, prioritizing Google’s own local search results over Yelp’s, and manipulating its algorithm to divert users away from Yelp.
Yelp asserts that these actions were driven by Google’s desire to suppress competition and boost its own profits, to the detriment of both consumers and competition.
While Google says it prioritises its own reviews because their higher quality, Yelp noted that a Federal Trade Commission report found 32% of reviews on Google have no text, while review text is always required on its platform.
Yelp's filing says it is entitled to threefold or trebled damages, as well as costs, expenses, attorneys’ fees and interest and is also seeking an injunction preventing Google from "continuing the unlawful conduct alleged herein and from employing any similar anticompetitive strategies that have similar purposes and effects".
A Google spokesperson said in a statement Wednesday: “Yelp’s claims are not new. 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."