Yelp vs. Google: Antitrust dispute plays out in San Francisco

Yelp has been complaining about Google's practices for years, claiming that the tech giant places its own products ahead of its competitors in Google search results.

Yelp says that when a customer searches for “restaurants in Brooklyn,” for example, Google prioritizes its own summary and reviews over non-sponsored results from competitors like Yelp, resulting in fewer customer visits and advertising revenue for the company.

The San Francisco-based company, which crowdsources customer reviews, is now taking its complaints to court in a closely watched federal court case that is 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 coming from Google. The lawsuit also alleges that Google is changing its algorithm to keep customers away from Yelp.

“Google's conduct has harmed Yelp through lower traffic, reduced advertising revenue, increased costs to Yelp, and impaired network effects associated with a reduction in the number of new and returning users,” Yelp's lawsuit states.

Google dismissed the allegations as unfounded, pointing out that the Federal Trade Commission (FTC) concluded in 2013 that Google had neither violated antitrust law nor caused harm to consumers.

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

Legal experts said the suit could be the first of several lawsuits against Google, the Mountain View, Calif.-based tech giant whose business practices have come under increasing scrutiny. The suit comes weeks after a federal judge ruled that Google violated antitrust laws and was a monopolist in internet search, paving the way for Yelp and possibly other companies to sue Google over antitrust practices.

“This decision was really groundbreaking for antitrust law,” Yelp's general counsel Aaron Schur said in an interview. “We saw it as a very strong basis to argue in court that Google, this illegal monopolist in general search, was actually abusing that monopoly to dominate a local search market and a local search advertising market through self-preferential treatment.”

The ruling by U.S. District Judge Amit Mehta earlier this month marked a notable shift in the interpretation of U.S. antitrust laws that have traditionally been applied to deal with major oil and railroad companies amid concerns that these companies could grow so large that it would impact prices for consumers.

“Since the turn of the century, people have been reluctant to file such lawsuits because antitrust law didn't cost anything back then,” says John Shaeffer, a partner at the law firm Fox Rothschild.

Google announced that it would appeal the ruling.

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

“It certainly opens up the opportunity for others who find themselves in a similar situation or simply argue that they have been harmed by Google and its monopolistic behavior,” said Carl Tobias, a law professor at the University of Richmond.

Google said “Yelp's claims are not new,” noting that the San Francisco-based company made similar claims years ago. The company said Yelp's search results help businesses and drive more than three billion clicks to websites each month.

Although the FTC found no antitrust violations by Google in 2013 after a 19-month investigation, leaked documents since then revealed that some FTC staff had urged the commission to sue Google over some of its practices, according to the Wall Street Journal.

Yelp has also been the subject of FTC investigations, but no action has been taken against the company. Google has attempted to acquire Yelp in the past.

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

State lawmakers unsuccessfully pushed a bill that would have required companies like Google, which sell advertising in addition to news content, to pay news publishers. A settlement was later negotiated under which Google would pay about $173 million over five years, which would go to journalism institutions and an AI acceleration program.

“We have seen a real shift in the political climate and in the realization that antitrust law is really important for everyone,” Schur said.

Yelp's lawsuit could ultimately end up in the Supreme Court.

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

Times news researcher Scott Wilson contributed to this report.