It’s great to see Stoppleman and Yelp continue to stand up to Google on this. While it helps them, it also attempts to carve out a space for other innovators in the guidebook and local space — which is basically the same now.
Yelp has become the latest company to publicly join a complaint to European regulators over the way Google chooses to promote its own services alongside those of rivals.
In an official complaint to the European Commission last month, the reviews site has urged it to block a proposed settlement with Google that would require the search giant to include links to three rivals whenever promoting its own specialised search services, such as shopping or local search.
In Yelp’s initial complaint to EC president Manuel Barroso in May, CEO Jeremy Stoppelmann wrote: “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.”
Stoppelman is concerned that Google ranks its own Google+ Local service more highly than Yelp’s in search results for reviews of restaurants and services, even when Yelp’s freely accessible web site has more reviews.
Research published in May by the stockbrokers Piper Jaffray, looking at a sample of 500 locations in the US, found that there were more reviews on Yelp and that the number of reviews grew faster than the number on Google+, and were on average five times longer – with a quarter of the “reviews” on Google containing no text and only a rating. “Yelp in comparison forces reviews to provide some text along with their rating,” the Piper Jaffray report said.
The reviews site has joined a number of smaller companies, and the software giant Microsoft, in objecting to the deal being proposed between Google and the competition commissioner Joaquin Almunia, who has been trying to formalise a settlement for nearly a year in the face of objections from companies which say that Google is abusing its dominant position in search in Europe, where it gets more than 90% of searches.
“Local search” for location-based information is the largest category of the roughly 3.5bn searches carried out each day. They constitute about a third of searches on desktop, and nearly half on mobile. Sources familiar with Yelp’s complaint say it fears being forced out of the market by Google despite claiming to offer a better service.
While Yelp has much smaller revenues than Google, at around $233m annually against $60bn for the search giant, it has specialised in providing reviews for locations. It is a supplier to Apple’s Maps service, among others. Stoppelman testified in 2011 to the US Senate about his concerns over Google’s search dominance.
The Guardian understands that Stoppelman has also spoken to Almunia to express concerns about the proposed deal, which would bind Google for five years to give certain concessions to rivals, but remove the risk of a fine that could amount to 10% of its global annual revenue.
Writing to Barroso, Stoppelman said he was filing the complaint with Almunia because “in order to truly advocate on behalf of European digital startups, our voice needed to be granted some form of official standing.” He said that the potential for the economic opportunity from the internet “cannot be realised unless every possible step is taken to prevent abuse by dominant firms”.
Under the proposed settlement, rivals would be given almost equal prominence as Google’s own paid-for links when users searched for restaurants, hotels, or shopped for items such as cameras. But it has drawn criticism from those rivals because they would have to bid to appear in the spaces – leading them to complain that they would have to hand over a proportion of their revenue to Google even if their service might be better than Google’s.
Google contends that it is under no obligation to provide business rivals with free space to advertise their services on its search pages.
Yelp is seeking to join complainants including as the shopping service Ciao, German company Hotmaps, and the UK shopping search company Foundem, have complained that Google favours its own services and downgrades their in search results. Microsoft has complained that Google makes it difficult for advertisers to move campaigns from Google to its Bing search service.
Almunia said on Thursday that he had spoken with Yelp on “several occasions” but that its complaint had arrived too late to be considered along with the others, but that “in general terms we know very well what their concerns are”.
Google had no comment on Yelp’s move.
Almunia has been investigating the complaints for more than four years, but has indicated that he wants to settle the case by the time his term ends in October. Yelp indicated that it might try to appeal any settlement. “I will try to convince them not to appeal,” Almunia said at a weekly press conference.
He said that he would be sending out “pre-rejection” letters to 20 complainants in the case. That is a statutory move ahead of the intention to sign the consent with Google, though it is considered likely that some of the complainants will mount a court challenge if Almunia does sign an agreement.
This article originally appeared on guardian.co.uk