Yelp(s yelp) has formally complained to the European Commission about alleged anticompetitive behavior by Google(s goog), aligning the local search service with other complainants including Microsoft(s msft) and the European Consumer Organisation.
The case has been running for a good 4 years and antitrust commissioner Joaquin Almunia has been desperate to wrap it up, as his term is about to end. However, Almunia’s willingness to accept Google’s latest settlement proposals is not shared by several others within the Commission.
The antitrust investigation covers several Google activities, but the key one here is the placement of results coming from other vertical search engines, in areas such as shopping, restaurants and travel.
From witness to complainant
Almunia seems satisfied with the creation of a new box (inclusion in which would be paid for via auction) near the top of Google’s European search results pages. However, the complainants maintain than the boxes are positioned in a kind of dead zone that users ignore – they have commissioned “heat map” user attention studies to prove this point.
Yelp submitted its formal objection at the start of June, following a letter from Yelp CEO Jeremy Stoppelman to outgoing European Commission chief José Manuel Barroso. Stoppelman previously testified before the Congress about Yelp’s fractious history with Google, in a separate U.S. antitrust case that ended with little more than a slap on the wrist.
Stoppelman’s letter to Barroso, embedded below, stated that Yelp — already a witness behind the scenes — was becoming a formal complainant “in order to truly advocate on behalf of European digital startups.”
Stoppelman said Google was trying to “foreclose” competitors in the local search market (where Yelp operates), writing:
“I truly fear the landscape for innovation in Europe is infertile, and this is a direct result of the abuses Google has undertaken with its dominant position.”
Multiplicity of inputs
Yelp’s argument, I understand from a source close to the matter, is that instead of creating new “non-Google-source” boxes on its results pages, Google should adapt its algorithms so that they don’t favor Google’s own product and service listings over those coming from Yelp, TripAdvisor and so on.
Right now, for example, if you search for “hotels bilbao spain” in Google from Europe, you’ll get this box, based on ratings from the Google+ ecosystem, with hotels being promoted on the basis of a handful of reviews:
Compare that with the results from Tripadvisor, where the top hotels’ standing is based on hundreds of reviews:
The idea being promoted by Yelp is that the box in the first picture should take into account the most relevant and useful sources, rather than giving Google+ based local search results prominence even though they’re markedly less useful than those from rivals.
I personally see merit in this neutrality-based approach because, as I have repeatedly noted, Google’s future may not involve selections of possible answers, as is currently the case in the desktop-centric world.
Google Now, Android Wear and Google Glass are all about providing single answers to queries, and ensuring a multiplicity of inputs is probably the only way to ensure Google plays fair – certainly in a market like Europe where the company has well over 90 percent of the search market and Android is the dominant operating system.
Either way, Yelp’s involvement will throw yet another spanner in Almunia’s works. The company doesn’t have a long history of antitrust troubles like Microsoft does, and it’s a much better-known vertical search player than the likes of Foundem, which has been involved since the start of the investigation. It will be very difficult for Almunia to brush this off, so I would not be surprised at all to see this case passed on to the incoming Commission after the summer break.
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