Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Yelp partially granted issue preclusion for matters decided in government's case against Google, (Jul 6, 2026)

By Kenneth H. Ryesky, M.B.A., J.D.

Issue preclusion limited to date of Department of Justice case decision because "generative AI may have shifted the relevant market dynamics, eaten away at Google’s monopoly power, or both."

The federal district court in San Jose, California has partially denied issue preclusion to Yelp in its antitrust lawsuit against Google. Yelp had moved for issue preclusion on some findings made in a separate lawsuit brought against Google by the Department of Justice and several state attorneys general. The magistrate granted issue preclusion on certain market definition issues and on Google's monopoly power, but denied issue preclusion on other matters (Yelp, Inc. v. Google LLC, No. 5:24-cv-06101-SVK (N.D. Cal. Jun. 30, 2026)).

Background. When the Internet first became commercialized, search engines relied upon each individual website's own indexing. Search results were displayed in an order that depended upon the number of times the keyword entry appeared on the webpage.

Google Inc., which later reorganized into Google LLC developed innovations in search engine technology that entailed (1) proactively "crawling" the Internet to obtain data displayed on individual webpages instead of using the websites' own guides; and (2) analyzing the websites' relationships with one another. These innovations and others brought Google, Inc. success as an Internet search engine provider. Google, Inc. then branched out into other advanced technologies.

Google's success gave it dominance in the general search services (GSS) market, and drew the attention of the Justice Department Antitrust Division, which, together with various state antitrust enforcers, brought a lawsuit against Google in 2020; the lawsuit resulted in a decision of 160 printed Federal Supplement pages following a bench trial in which detailed findings regarding Google's liability were set forth [U.S. v. Google, 747 F. Supp. 3d 1 (D.D.C., Aug. 5, 2024)]. Google's appeal of that decision is pending.

Yelp, Inc. is a specialized vertical provider (SVP) that "was born out of a need for reliable, easy-to-find information about businesses in local communities" and "provides a one-stop local platform for consumers to easily discover, connect, and transact with local businesses across a broad range of categories." In 2005, Google and Yelp formalized a symbiotic relationship whereby Yelp licensed its business information and crowd-sourced reviews to Google to use on Google's search engine results pages (SERPs). Following the two-year term of that agreement, Yelp, having learned that Google intended to offer a product that competed with Yelp, declined to renew the licensing agreement, and later rebuffed Google's attempt to acquire Yelp.

As Google's general search engine gained and increased its market domination, Yelp became dependent upon Google's SERPs as a "gateway" for Internet searchers to learn about Yelp's services. Yelp brought a lawsuit against Google, alleging anticompetitive conduct in Google's self-preferencing of its own specialized vertical search results over Yelp's. In the course of that litigation, Yelp moved for the court in which its own case was brought to give preclusive effect to determinations and findings made by the judge in the Justice Department's lawsuit in the other district court.

General Search Services. The magistrate judge found that issue preclusion was appropriate on the findings regarding the market definition for GSS. There was no dispute here that the GSS market and the Local Search Services (LSS) market were two separate markets.

As for the GSS market, the magistrate found that the GSS market as defined by Yelp in its amended complaint was the same market found in the government's case, notwithstanding the differences in their contexts. The GSS markets in the respective cases all had the same (1) characteristics and uses; (2) recognition by the public and by industry; and (3) unique production facilities. The preclusive effect was specifically limited to particular finding in the Justice Department decision, and only through August 5, 2024, the date of the decision in the case. For similar reasons, the magistrate judge determined that the issue of Google's monopoly power was precluded, having been determined in the case.

Search advertising market. The magistrate judge denied issue preclusion on the issue of the search advertising market. Here, there remained questions of fact as two whether local search advertising was (1) a first-order submarket of search advertising and therefore a second-order submarket of digital advertising; or (2) an independent parallel market to search advertising. This factual dispute between Google and Yelp precluded a grant of issue preclusion.

Equitable issues. In making her ruling, the magistrate judge noted some relevant equitable issues. In addition to limiting the preclusive effect to the August 5, 2024 decision date in the government's case, the magistrate's order found that the Seventh Amendment guarantee against reexamination of a jury trial decision did not apply because the Justice Department case decision resulted from a bench trial. Moreover, the issue preclusion granted would not affect any damages sought by Yelp that might be granted. Here, Yelp sought statutory treble damages, which are determined through a mathematical formula and not subject to a direct jury determination.

Additionally, circuit precedent provides that the pendency of an appeal does not bar a grant of issue preclusion. "If Google ultimately prevails on its appeal, it has multiple options to solve the 'potential problem' of preclusion based on a vacated judgment, including 'a direct action to vacate the second judgment.'"

The Case is No. 5:24-cv-06101-SVK.

Judge: Keulen, S.

Attorneys: Daniel John Walker (Hausfeld LLP) for Yelp Inc. John Edward Schmidtlein (Williams & Connolly LLP) for Google LLC.

Companies: Yelp Inc.; Google LLC

Cases: Antitrust CaliforniaNews