Google Faces Wave of Antitrust Lawsuits After Recent Court Rulings

Alphabet’s Google is confronting an escalating antitrust landscape, as recent court decisions and a new lawsuit from Yelp Inc. could lead to a wave of private legal actions. According to Bloomberg, these developments follow a significant victory for the Justice Department in a monopolization case and Yelp’s complaint filed this week.

On August 5, Judge Amit P. Mehta ruled that Google possesses monopoly power in the general search services and search text ads markets. This finding, per Bloomberg, sets a potentially transformative precedent for future antitrust litigation, potentially spurring additional claims from competitors and consumers alike.

Yelp’s lawsuit, filed on August 28 in the Northern District of California, focuses on Google’s dominance in the local search advertising sector. Yelp accuses Google of using its market power to unfairly prioritize its own products in search results, disadvantaging local search competitors.

Michael Carrier, an antitrust professor at Rutgers University, explained to Bloomberg that Mehta’s ruling provides a strong foundation for new antitrust claims. “The court’s detailed findings on Google’s monopoly power are likely to inspire other rivals to take legal action,” Carrier said. Some companies may choose to wait for the appeal outcome to establish firmer precedent, while others, like Yelp, are acting promptly.

Related: Google Fights DOJ’s Witness List Ahead of High-Stakes Antitrust Trial

Peter Mucchetti, a former DOJ attorney now with Clifford Chance, suggested to Bloomberg that if Mehta’s ruling is upheld on appeal, it would greatly benefit plaintiffs. “The ruling provides a significant advantage to those challenging Google’s market practices,” Mucchetti noted.

In response to Yelp’s lawsuit, Google has stated it will “vigorously defend” itself against what it describes as “meritless” claims. Despite this, legal experts anticipate an increase in antitrust lawsuits. George Hay, a Cornell Law School professor, told Bloomberg that the recent ruling might trigger a surge in claims. “With the court’s determination of monopoly power, lawyers will be motivated to pursue these cases,” Hay said.

Furthermore, advertisers who purchase search ads from Google might also seek damages. Bill Baer, a former head of DOJ’s antitrust division, mentioned to Bloomberg that such claims could gain traction. “Advertisers who have been affected by inflated costs due to Google’s alleged monopolistic practices may find it easier to pursue their claims,” Baer observed.

Yelp’s lawsuit, while similar in some respects to the DOJ’s case, differs by focusing specifically on the local search advertising market. Yelp argues that Google’s integration of reviews into its search results harms its ability to compete. Erik Hovenkamp, an antitrust professor at Cornell Law School, explained to Bloomberg that this practice negatively impacts Yelp’s visibility and revenue by keeping users within Google’s ecosystem.

As these legal challenges unfold, Google faces mounting scrutiny and potential legal battles, underscoring the intensifying scrutiny on its market practices.

Source: Bloomberg