Following the April launch of an European Union regulatory investigation of biased Google search results to favor its own products , Yelp commissioned a study to determine if Google engages in any predatory actions that hurt users.
Yelp released a scathing report on Monday that is a “roadmap” for EU regulators to quantifying how and to what extent Google degrades user search results to maximize its own financial gains.
Yelp teamed up with Columbia University’s Professor Tim Wu, the most prominent academic in the field of competition law for technology and the former adviser to the U.S. Federal Trade Commission that coined the phrase “net neutrality,” to treat access to all content equally, without favoring or blocking particular products or websites.
The stated goal of the study was to detail any actions by Google’s that unfairly prioritize its own services when performing local searches, and to what extent Google’s actions cause unfair and abusive harm to user’s access to useful information.
The report introduction co-authored by Wu , Michael Luca of the Harvard Business School, and Yelp’s Data Science Team states: “Consumers vastly prefer competitive results, as scored by Google’s own search engine, than results chosen by Google.” They added, “Google is reducing social welfare,” proclaims.
The analytic paper presents the “findings of a randomized controlled trial wherein purely algorithmic search results are compared to Google’s query-specific, tailored results. In some circumstances, there’s an obvious benefit to the user — such as when Google provides immediate answers to calculation or conversion queries — but the research also finds instances where that’s not the case.”
The study focused on local services and information that is now about a third of all Google inquiries and almost half mobile inquiries. The researchers found that there are different “competitive results, as scored by Google’s own search engine, than results chosen by Google.”
The study did find that consumer preferences as measured by “simple clicks” showed that users were 45 percent more likely to click on organic search results than Google’s tailored search that presents its own list of nearby businesses or services.
Because Yelp specializes in local referral searches, the company has become a major adversary against Google for not honestly presenting local information. When questioned about his independence if he was paid by Yelp, Wu told the Recode blog, “I wouldn’t be doing this if I didn’t think this new evidence was a game-changer.” He added, “this is the closest I’ve seen Google come to the Microsoft case”
Known as the U.S. vs. Microsoft Antitrust Proceeding, the case involved a complaint by the Justice Department and 19 states that Microsoft’s bundling of its Internet Explorer browser with Windows artificially promoted Internet Explorer despite the existence of far superior alternatives. A federal District Court in 2000 found in a 43 page blistering opinion that Microsoft used predatory and anticompetitive behavior to keep “an oppressive thumb on the scale of competitive fortune.”
The judgment barred Microsoft from anti-competitive practices regulators said had been choking off competing software, like Netscape, on the company’s Windows platform. Leading antitrust scholar Herbert Hovenkamp, said the Microsoft judgment broke new ground. “We’ve seen the emergence of an entirely new field called IP [intellectual property] antitrust,” he said. “It’s had a fairly dramatic impact.” The company was forced to sign a consent decree prohibiting entering into Windows agreements that excluded competitors from new computers. Microsoft was also forced to make Windows interoperable with non-Microsoft software. But the biggest impact was Microsoft became “much more cautious and much less aggressive,” spurring a burst of new competition.
The Yelp sponsored report reads like a roadmap for litigation. The researchers found “empirical evidence” that Google’s search practices have harmed consumers in some cases and as such “cannot be described as pro-competitive.” The demonstration of consumer harm “should influence any competition law analysis.”
One official at a European antitrust authority told that Wall Street Journal that any study showing Google caused “quantifiable harm” to consumers would “certainly bring things forward” for EU regulators. The official added that regulators “will be delighted to have as much evidence as they can.”
Google has repeatedly denied breaking EU antitrust rules, but declined to make any comment regarding the merits of the new study, according to the Journal. On Monday Google said it had requested, and been granted, an extension until August 17 to respond to the EU’s charges, in order to review documents related to the case.