Airbnb Lays Anti-Competition Allegations Against Google In IPO Filing

Airbnb, Inc said in a regulatory filing on Monday that Alphabet Inc GOOGL GOOG subsidiary Google had disadvantaged it by denying it internet traffic.

What Happened: The vacation home-rental company in its S-1 filing with the U.S. Securities and Exchange Commission for an initial public offering, under the “Risk Factors” header, said it had been “adversely affected” by the launch of Google Travel and Google Vacation Rental Ads.

“[Google Travel and Vacation Rental Ads] reduce the prominence of our platform in organic search results for travel-related terms and placement on Google,” Airbnb said.

The company claimed that, if its brand or platform were listed less prominently, it would need to increase its paid marketing spend — which would lead to higher customer acquisition costs among other issues. 

The San Francisco-based rental aggregator said if Google and Apple Inc AAPL favor their own travel services or bar it from offering its products on mobile operating system or app distribution channels they own, it could have an “adverse effect on our ability to engage with hosts and guests who access our platform via mobile apps or search.”

Why It Matters: Airbnb said it is focusing on search engine optimization, which involves tailoring content to appear on web searches.

“Changes to search engine algorithms or similar actions are not within our control, and could adversely affect our search-engine rankings and traffic to our platform,” the company warned.

Airbnb has 5.6 million active listings and 54 million active bookers with over 247 million guest arrivals. The company had a gross booking revenue of $38 billion in 2019, higher by 29% year-over-year, as per its S-1 filing.

Price Action: Alphabet Inc Class A shares closed 0.1% higher at $1,774.03 on Monday and fell 0.11% in the after-hours session. On the same day, the company’s Class C shares closed 0.25% higher at $1,781.38 and rose 0.2% in the after-hours session.

Related Link: DoJ Officially Files Antitrust Lawsuit Against Google