Reviewing Yelp’s PR War Against Google

It’s no secret that Yelp has a vendetta against Google. Yelp has long complained that Google favors its own content in search results over Yelp’s, most recently in a recent 60 Minutes piece and in its new “Focus on the User” campaign. Despite having no problem reaching its users, Yelp has engaged in a multi-year campaign to use antitrust law to force Google to direct more traffic to its services. While Yelp may have convinced some TV producers, its biggest problem is the cornerstone of antitrust law is that it exists to protect consumers and not competitors.

Yelp has already made its case to antitrust enforcers, and the FTC comprehensively investigated Google’s conduct. At the end of this long investigation, all five Commissioners unanimously decided to close the investigation into Google Search’s product changes in accordance with the unanimous recommendations of staff. The FTC also specifically addressed Yelp’s allegations that Google ranks its own content higher than Yelp’s and disadvantages Yelp in search rankings, stating:

Google’s display of its own content could plausibly be viewed as an improvement in the overall quality of Google’s search product. Similarly, we have not found sufficient evidence that Google manipulates its search algorithms to unfairly disadvantage vertical websites that compete with Google-owned vertical properties.

Since the FTC closed its investigation, Yelp’s user base has grown by close to 70%. Despite this, Yelp continues to lobby and continues to get attention five years later. So it is worth considering why the FTC closed its last investigation and whether those reasons still hold true today.

Simply put, the evidence before the FTC didn’t show that Google’s conduct hurt consumers and instead led to the conclusion that Google’s innovations in Search benefited consumers. Yes, Google shows its own results in direct answer to consumers’ questions (think of the map you see when you search for an address). And yes, Google gains from this increase in consumer attention. But the important measure is not whether Google benefitted or competitors are harmed, it’s whether the conduct benefits consumers.

Using this measure, it remains true that Google’s immediate answers are useful to consumers many of whom want an immediate answer. The obvious benefit is that a consumer received an answer right away rather than being directed to another site to perform another search. Unsurprisingly, Google’s innovation has been adopted industry-wide, and similar results by Bing and Yahoo! shows the value acceptance of immediate answers to consumers.

Even a measure focused on Yelp’s welfare wouldn’t lead to enforcement. While Yelp’s sour grapes are unlikely to stop, it was clear at the time of the FTC investigation that competition was a click away. And Yelp’s continued rapid user growth since the FTC closed its investigation vindicates the FTC’s conclusion. One might question whether this campaign is worth the continued expense of resources, especially now that consumers’ reliance on smartphone apps gives Yelp a direct conduit to their customers. Indeed, Yelp’s app is currently ranked the #1 app in the Android Play Store’s travel and local section with over 10 million downloads. And Yelp is available on many different surfaces that don’t rely on Google, like Apple’s App Store, Amazon’s Alexa, Toyota’s Entune portal, and more. Thus, in addition to a lack of consumer harm, and there’s scant evidence of harm to Yelp as well.

More broadly, the claims that Google is acting like a monopolist don’t square with reality. We expect monopolies to invest less in product improvements and charge more when faced with a lack of competition, leading to plummeting sentiment amongst consumers stuck with high prices and stagnate services.  But Google is ranked as America’s most loved brand by Morning Consult and third most respected brand by Fortune and continues to provide a long list of free services. And given Google’s need to keep up in a highly competitive market, its R&D spending is the second highest in the world. Google’s Search innovations are a reflection of this need to focus on keeping users happy in a competitive market.

There is nothing to indicate that antitrust regulation needs to be changed to accommodate Yelp’s complaints against Google. Indeed, doing so would be a dangerous precedent for a body of law meant to protect ordinary consumers. As Yelp continues its call for regulation over the years, we should continue contrasting their complaints against the clear evidence of consumer benefit.

Algolia Trends


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