Today, Yelp filed an antitrust lawsuit against Google in federal court in San Francisco. Our case is about 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. Abandoning its stated mission to deliver the best information to users, Google has illegally abused its monopoly in general search to dominate the local search and local search advertising markets—engaging in anticompetitive conduct that has degraded the quality of search results and demoted rivals to grow its market power.
Yelp has long fought to make Google’s local search experience more helpful for consumers and create a level playing field for competing vertical search services. With our action, we aim to safeguard competition, protect consumer choice, recover damages, and prevent Google from engaging in anticompetitive practices so that innovation may flourish.
Google Abuses its Monopoly in General Search to Dominate Local Search
Google has long been the dominant “gatekeeper” in general search, with approximately 90% share of the market. Its monopoly in general search — which Google was recently found to have illegally maintained through exclusive multi-billion dollar arrangements with browser makers, device manufacturers, and cellular carriers — allows it to control what consumers see and where they see it. This dominance has given Google tremendous power over adjacent markets, including local search and local search advertising.
On desktop, nearly a third of the roughly 9 billion daily Google searches have local intent. On mobile, that portion rises to nearly half. When a consumer conducts a Google search with local intent, Google manipulates its results to promote its own local search offerings above those of its rivals, regardless of the comparative poorer quality of its own properties, exempting itself from the qualitative ranking system it uses for other sites. Rather than compete on the merits with companies like Yelp, Google has so effectively self-preferenced its offerings that an increasing volume of searches result in zero clicks, meaning users never leave Google’s search results page. And even when searches do result in a click, 30% of those go to another Google property. In other words, Google abuses its monopoly power in general search to keep users within Google’s owned ecosystem and prevents them from going to rival sites. This anticompetitive conduct siphons traffic and advertising revenue from vertical search services, like Yelp, that provide objectively higher quality local business content for consumers.
Long term, I think we need to commit to a more aggressive path w/ google where we can show non-webpage results on google outside of the universal ‘box’… most of us on geo think that we won’t win unless we can inject a lot more of local directly into google results.
Email from John Hanke, former Head of Google Local (page 128 of the 2012 FTC Report)
Why is Google so unwilling to compete fairly and subject its own content to its qualitative ranking algorithm? The answer is simple – Google knows that it won’t win on the merits of quality in local search, and its past and current behavior confirms this. In 2009, Google began scraping reviews from Yelp and other local search services, and misrepresented that content as its own — only stopping after a 2011 FTC investigation condemned this conduct. Since then, it has struggled to close the quality gap. An FTC economist found that 32% of Google’s so-called “reviews” are not reviews at all, consisting of only star ratings with no text. Knowing that users find reviews without text to be less helpful, Google buries those ratings below its text reviews for a given business yet still includes them in its overall “review” count to inflate its credibility with consumers who are looking for a trustworthy rating based on quality reviews. By comparison, review text is always required on Yelp, where reviews are also consistently longer than those found on Google in the U.S., often by 500% or more.
Google’s Anticompetitive Conduct Harms Consumers, Competition, and Advertisers
Consumers lose by getting stuck in Google’s walled garden of inferior quality, with multiple studies showing that people consistently prefer search results that incorporate third-party content. By keeping users from leaving Google, other vertical search services are prevented from reaching customers, achieving scale, and building helpful content. This softening of the competitive landscape translates to less incentive for Google to invest in quality content that would improve the consumer experience, and greater incentives to show less relevant but nevertheless monetizable results.
When competitors can’t achieve scale due to Google’s self-preferencing, it harms advertisers too. Google’s conduct suppresses competition in the local search advertising market, ensuring that more local advertisers turn to Google. As a result, Google can extract higher fees from advertisers with little consequence, according to studies. Notably, Google has increased its year-over-year search advertising revenue by 20% or more each year for the better part of the last decade, while still being able to increase its market share.
Up until [Google rolled out Google Finance]… we had the top five finance sites in their order of popularity. So when we rolled out Google Finance, we did put the Google link first.]. Seems only fair, right? We do all the work for the search page and all these other things, so we do put it first. That’s actually been a policy then, because of Finance, we implemented in other places. So for Google Maps, again, it’s the first link and so on and so forth, and after that it’s ranked usually by popularity.
– Marissa Mayer, Google’s former VP of Search Products and User Experience (Reclaim The Net)
Google’s Long History of Unlawful Conduct is Recognized Around the Globe
Courts and government enforcers in the United States and Europe agree that Google has engaged in illegal conduct as a monopolist. Earlier this month, a federal judge in Washington, D.C. concluded that Google has unlawfully maintained a monopoly in the general search market for years. In September, the Department of Justice and another bipartisan group of state Attorneys General are scheduled to take Google to trial over claims of monopolization of advertising technology markets. In 2017, the European Commission fined Google $2.6 billion for its illegal self-preferencing of its own shopping recommendations over those of rivals; and in March, the European Commission announced its own investigation of Google’s self-preferencing in search results under the recently enacted Digital Markets Act. In 2021, the Turkish competition authority found that Google illegally self-preferenced in local search. And last year, Epic won its own antitrust lawsuit against the search giant when a jury found that Google illegally monopolized its Google Play app store and Google Play billing service.
A Fair and Competitive Internet Where Innovation Can Flourish
Google should not be both the monopoly provider of general search results and the self-preferencing curator of its own local search content. That’s the equivalent of being both the judge and a competitor in the same Olympic event. Antitrust laws were designed to prevent a monopolist like Google from abusing its dominance in this way. By self-preferencing its own offerings, Google increases its share of users and advertising revenue at the expense of the consumer experience and local search rivals, like Yelp. Over time, this sabotages local search competitors’ ability to continue offering superior products, diminishing choice for consumers and advertisers.
The courts and antitrust enforcers understand what is at stake. When markets work like they’re supposed to, innovation flourishes thanks to promising startups and healthy competition, ultimately benefiting consumers. That is why Yelp has long called on Google to match consumers with the best possible local search information at the top of the search results page, ranking Google’s content alongside other third-party content providers using Google’s organic search algorithm. In that environment, companies can fairly compete and consumers receive the most high-quality, relevant information.
For 20 years, Yelp has focused on our mission to connect consumers with great local businesses. We believe our lawsuit takes a critical step towards a level playing field in which Yelp and other local search providers can effectively compete, and provide consumers with the best local search experience.