Dive Brief:
- Yelp sued Google over practices Yelp claims “prevent businesses from reaching customers without paying Google and starves competitors of the traffic and revenues that would allow them to achieve scale,” according to a complaint filed Wednesday in the U.S. District Court for the Northern District of California.
- Yelp alleges that Google’s search design and page layout is designed to shift traffic away from “specialized vertical providers,” like Yelp, that collate specialized results related to specific topics.
- Yelp is seeking damages and an injunction against a number of Google’s business practices. The suit argues that Google’s behavior in local search advertising markets harms consumers and businesses by degrading the relevance of results.
Dive Insight:
Google’s dominant position in the U.S. search market — Statcounter estimated it accounted for 87.5% of all search traffic in July — means it has extreme market power.
Yelp alleges that this dominance in search queries allows Google to provide inferior search results while stifling its specialized competitors. Yelp claims that its search service provides more value for consumers, and that Google obscures reviews posted on competitor sites. In the past, Yelp said in a statement, Google scraped reviews from Yelp to help populate its own local search results.
“Google’s local search results are on average shorter, more prone to error, less subject to quality control, and less likely to result in user engagement than Yelp’s local search results and those of other local search competitors,” Yelp alleged in the suit. This could lead to users finding less relevant results when looking for local businesses, like restaurants. From 2021 to 2019, 70% of Yelp’s traffic originated with Google, according to the complaint.
Because search is free, lower quality search results are akin to an increase in price for a good, Yelp noted. Yelp alleges that Google’s own internal tests of search quality show that when Google search quality is degraded, traffic remains substantially unchanged, an indicator of significant monopoly power.
Google has introduced more changes to search of late, including summarized search results, which use large language models and generative AI to produce predictive descriptions based on the content of results.
LLMs are predictive algorithms that replicate human language patterns but have no way of verifying information. This could lead to a degradation of underlying search results as people turning to the web find an LLM’s estimate of what the answer to their question should look like, which occasionally links out to sources, rather than a list of sources. Earlier this year, this underlying issue with LLMs led Google’s results to advise users to eat rocks.
Yelp uses similar technology to generate summaries for businesses based on the content of reviews. The company recently integrated its reservations capabilities with Google search and Google maps.
Google did not respond to a request for comment.