Yelp Sues Google over Anticompetitive Practices

Source: Freepik-search-concept-landing-page_52683-21096

In a surprising move, Yelp filed a federal antitrust complaint against Google for anticompetitive behavior designed to secure its dominance in the local search market. According to the lawsuit filed in federal court, Google has leveraged its monopoly in general search to improperly promote its own local search products and disadvantage competitors.

The complaint from Yelp alleges that Google has leveraged its market position to “pad its own bottom line at the expense of what’s best for consumers, innovation, and fair competition.” According to the company, such practices by Google have harmed the former by shrinking consumer choice while increasing business cost.

According to Yelp, Google’s self-preferencing practices include:

• It claims that Google has systematically favored its own local search products over those of competitors, in the process making it hard for businesses to show up on Google Search.
• Lack of access to data: Yelp also says Google limits its access to data and other tools required to effectively market itself against the local search leader.
• Predatory pricing: The company claims Google offers businesses lower prices for their local search advertising if they use a variety of its other offerings, such as Google Ads.
• Yelp is seeking treble damages under the Clayton Act that can bring a really hefty financial penalty against Google. The company also hopes for injunctive relief to force Google to alter its practices.

It comes after a major antitrust case filed by the Department of Justice against Google, in which the government accused Google of illegally maintaining its monopoly in general search and advertising. Though the outcome from the case from the DOJ is pending, that has pegged more pressure on Google to take new concerns into consideration regarding its market power.

The lawsuit filed by Yelp will surely be closely watched, not only by industry observers but also by the experts in the field of antitrust. It has far-reaching implications for how local search and antitrust law are shaped from here on out. Additionally, such a case may set a precedent for the many other companies who have been able to prove they have been harmed by Google’s formidable dominance in the marketplace.

To date, Google has not publicly responded to Yelp’s lawsuit. However, the company has generally defended its business practices, saying it competes fairly in all its markets.

The result of the Yelp lawsuit might be what turns the tide in the local search industry. Should anticompetitive practices be proved to exist on Google’s part, it could be forced into heavy changes in business operations. This may benefit the consumer, raising competition and further reducing prices.

Not only has Yelp fought Google in that lawsuit, but the company has also filed other lawsuits against the search giant. In 2016, Yelp sued Google for defamation after Google published negative reviews of the company in its Maps product. The case was later settled out of court.

A lawsuit filed by Yelp against Google perhaps represents one of the most serious challenges to the dominance of the technology company in the local search market. This is a case whose judgment might have wide ramifications on the future of the industry and antitrust law.

Yelp’s Lawsuit Against Google: What Are the Implications?

The case filed by Yelp against Google marks a milestone in deciding the future of local search and antitrust law. A successful case brought forth by Yelp will set a precedent for many companies that have been severely harmed due to Google’s dominant market position.

It is one of the central issues this lawsuit brings: how far Google can leverage its dominance in general search to favor its local search offerings. The company accuses Google of self-preferencing, or the practice of promoting one’s own products over competitors’. If the court rules with Yelp, it could drastically reshape how the business operates its practices.

Another important facet of the case: treble damages. Should Google be found liable, it would face the possibility of a significant financial penalty, serious enough to make a difference on the company’s bottom line and perhaps inviting more scrutiny toward its business practices.

The result of Yelp’s lawsuit might have broader implications for antitrust law as well. There have been recent growing concerns over the concentration of power in the tech industry. If Yelp succeeds, this could portend a new approach by the courts to enforcing the antitrust laws.

Moreover, the additional lawsuit filed by Yelp addresses some very important questions about the future of local search. For many businesses today, local search has become an integral means of reaching customers. A challenge to Google’s dominance would raise competition and, with it, innovation in the local search market.

It should also be taken into consideration that Google has a formidable team of lawyers who will most likely fight this suit with all teeth and nail. The company had already defended its business practices before, citing it is competing fairly in all markets.

Ultimately, whether Yelp’s suit prevails or not depends on how the court interprets the antitrust law. If it does find that Google has indulged in anticompetitive practice, that might bring in huge consequences for not only the technology industry but also the future of local search.

Beyond the Legal Implications

Yet while the legal implications of Yelp’s lawsuit are important, the case raises broader questions about the relationship between the tech giants and smaller business. The self-preferencing and predatory pricing of which Yelp accuses Google are hardly unique to the local search market. Countless small businesses have griped about the clout of the tech giants and their ability to stifle competition.

Yelp’s eventual success would embolden other companies to take on the tech giants. Smaller businesses would have a better playing field with their immediate communities, allowing them to foster innovation and healthy competition.

This is also where one remembers that tech giants provide a vital link in the chain of economics. They provide employment, create innovation, and give consumers value galore. What is required is to find that perfect balance between protection of competition and fostering of economic growth.

The Future of Local Search

The future of local search hangs in the balance. Should Yelp win this case, it would then usher in a competitive innovation for business in the marketplace. Still, it’s anybody’s guess that Google will successfully defend its business model.

But whatever the outcome of this case, it’s evident that the landscape for local search is changing. The explosion in mobile devices and the increased dependence of consumers on online reviews have dramatically changed how businesses reach out to customers.

While the market of local searches is at a point where it would keep on evolving, one finds it of paramount importance that businesses stay updated with the trends and technologies that keep changing. Understanding the changing landscapes better would be no less than equipping these businesses for a successful future.

Conclusion

The Yelp vs. Google lawsuit in federal court was a major event that may change the future of local search. The case raises vital questions about antitrust law, competition, and the power of tech giants.

That would hopefully give a rise to some more creativity, innovation, and competition in the local search market. However, the outcome of the case is not guaranteed, and it’s very much possible that Google will be able to defend its business practices.

As such, while the local search marketplace continues to change, it automatically becomes necessary to keep businesses updated in this regard by adopting all those changes. This will also help businesses understand any challenges and opportunities that the industry will go through, thereby placing them better to succeed in the future.

Sources:

• https://searchengineland.com/yelp-sues-google-local-search-446131
• https://www.searchenginejournal.com/yelp-sues-google-over-local-search-dominance/525687/
• https://www.ksby.com/business/company-news/yelp-sues-google-for-using-its-search-engine-monopoly-to-promote-itself-over-local-competitors
• https://www.newsbytesapp.com/news/science/yelp-sues-google-over-illegal-self-preferencing-in-local-search/story

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