An antitrust complaint filed by online review service Yelp Inc. (NYSE:YELP) could sideline a pending settlement between Google Inc. (NASDAQ:GOOGL) and European Union regulators worried that the big U.S. search engine gives itself preferential treatment in search results. It could also force Google to respond to competitors' complaints in court.
Commissioner Joaquín Almunia, the EU’s head of competition policy, has been working with the Mountain View, California, search giant for more than a year on a possible settlement of concerns that Google’s dominant position in European web search has made it difficult for rivals to gain traction there. Almunia hopes to have a deal with Google completed before he steps down this fall, but the formal inclusion of Yelp to the proceedings could have a "significant impact" on his plans, legal experts said Thursday.
“Yelp is not a company that always files these types of criticisms, so this will increase the pressure on Almunia to revisit the settlement,” Michael Carrier, a professor at Rutgers Law School who specializes in antitrust law, said.
Part of the tentative agreement Almunia has worked out with Google entails the company giving preferential treatment to competitors with its search results. But competitors like Microsoft Corporation (NASDAQ:MSFT), which was a party to the original complaint several years ago against Google, say it's not enough. In response to the concerns of Microsoft and Yelp, the commission could stiffen settlement terms with Google, or it could force the search giant into court, Carrier said.
“It doesn’t look good for Google that there were so many attempts to settle, so many revisions,” Carrier said. “If those fall through, it will seem like the critics have the upper hand, that there just wasn't enough in the settlement ... to allow it to proceed.”
According to European law, the commission must at least formally consider Yelp’s complaint, which was filed last month. If accepted, Yelp will also have the right to appeal any settlement between the EU and Google.
“I’m not surprised that the complainants are still going at this issue,” Keith Hylton, professor of law at Boston University, said. “The deal that Google arraigned seemed to be an unusually, surprisingly nice deal for Google.”
The most compelling complaint against Google, Hylton said, is its ability to observe the actions of competitors, like Yelp, and then mimic their services, potentially adding a new features or making improvements on the original. Google could then rank its own service more prominently, and receive the majority of web traffic from customers, which Hylton said was a “serious competition issue.”
Yelp’s complaint, following a formal review by the commission, could be rejected or accepted as part of the antitrust proceedings against Google, but at the very least the commission is obligated legally to respond to Yelp's complaint.
“They’re given a fair amount of discretion, but the EU has to actually formally respond in some way,” Spencer Weber Waller, a professor at Loyola University and director of its Institute for Consumer Antitrust Studies, said. “Having filed a formal complaint, Yelp would have certain rights to appeal if the EU chose to do nothing, or chose to proceed with a deal.”
So could Yelp eventually force Google into court? Waller said that its appeal would be “swimming upstream,” since the courts that hear its appeal would give leeway to the commission.
“Given that they’re toward the end of this investigation, given that there’s a deal that’s been pending for a while, in my view, it’d have to be a blockbuster” of an appeal to force Google into court, Waller said.