Yelp sues Google for anti-competitive practices
A longtime critic of Google, Popular online review platform Yelp has frequently complained about how the search giant treats other companies in its results. But it is the first time the San Francisco company has sued Google, despite years of protests to regulators around the world…
San Francisco: When a federal judge declared Google an illegal monopoly in a landmark ruling this month, it was not immediately clear what consequences the world’s largest search engine provider would face.
On Wednesday, Yelp, the popular online service that lets people find and review local businesses, sued Google in federal court in San Francisco. Yelp claims that Google used its dominance as a general, or all-purpose, search engine to gain an unfair advantage in local search services. Yelp is seeking unspecified monetary damages and an order for Google to stop its anticompetitive practices in a jury trial.
A longtime critic of Google, Yelp has frequently complained about how the search giant treats other companies in its results. But it is the first time the San Francisco company has sued Google, despite years of protests to regulators around the world.
“This is a watershed moment,” said Jeremy Stoppelman, Yelp’s co-founder and CEO. “This is the time to have the conversation, this is the time to correct past wrongs.”
Yelp is leaning on a ruling from Judge Amit Mehta of U.S. District Court for the District of Columbia that said Google had abused its power over online search. The Justice Department and states had sued Google, accusing it of illegally cementing its dominance by paying companies like Apple and Samsung billions of dollars a year to automatically steer users to Google’s search engine on their smartphones and web browsers.
Google said in a statement that “Yelp’s claims are not new.”
Peter Schottenfels, a Google spokesperson, said in a statement that similar claims were thrown out by the Federal Trade Commission about a decade ago and more recently by Mehta. “On the other aspects of the decision to which Yelp refers, we are appealing. Google will vigorously defend against Yelp’s meritless claims,” he said.
The company added that Yelp was an online middleman and it was more valuable to present direct connections to businesses. Google’s local search results direct more than 6.5 billion connections to businesses each month, it added.
The Justice Department has considered asking Mehta to break Google up, The New York Times has reported. But there will be another round of hearings to determine remedies in the case, starting in September. Google has said it will appeal the ruling.
Yelp sues Google The Old complaint
In 2010, Yelp filed a complaint with the European Commission, alleging that Google was favoring its own local search services over those of its competitors, including Yelp. This was part of a larger antitrust investigation into Google’s business practices. Yelp claimed that Google was scraping content from its site and using it in Google’s own local search results, which was seen as a violation of antitrust laws. The case was settled in 2014, with Google agreeing to display rival services more prominently in its search results.
Yelp Vs Google
The Yelp vs Google case refers to the ongoing competition and debate over which platform is more beneficial for businesses in terms of online reviews. Google has a larger search engine market share and its reviews are prominently displayed on business listings. On the other hand, Yelp has been a leading review and rating site for local businesses for over a decade. Both platforms have their own strengths and weaknesses, and businesses can benefit from using both, but understanding the differences is important. Google reviews may have a larger impact due to Google’s dominance in search, while Yelp reviews tend to be more detailed and critical. There have also been concerns about fake reviews on both platforms.
Anti-competitive practices in U.S. laws
Anti-competitive practices in U.S. law refer to actions taken by a company that reduce competition or create a monopoly, which can lead to higher prices, lower quality products, and fewer choices for consumers. These practices are regulated by federal agencies like the Federal Trade Commission (FTC) and the Department of Justice (DOJ).
Examples of anti-competitive practices include:
- Price fixing: When competitors agree to set prices at the same level, which can lead to artificially high prices.
- Bid rigging: When competitors secretly agree on who will win a bid, which can lead to higher prices for the buyer.
- Market allocation: When competitors agree to divide up markets or customers, which can limit consumer choice.
- Tying: When a company requires a customer to buy one product in order to purchase another product, which can limit consumer choice.
- Monopolization: When a company uses its power to eliminate competition and maintain a monopoly.
These practices are illegal under U.S. antitrust laws, including the Sherman Act and the Clayton Act, and can result in significant fines and penalties.