US presses on with fight against Google's search and advertising clout

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Logo is pictured at Google's European Engineering Center in Zurich

A logo is pictured at Google's European Engineering Center in Zurich, Switzerland July 19, 2018. REUTERS/Arnd Wiegmann/File Photo Acquire Licensing Rights

WASHINGTON, Sept 13 (Reuters) - The Justice Department questioned a former Google executive about billion-dollar deals with mobile carriers and others that helped make Google the default search engine, in the second day of a once-in-a-generation antitrust trial on Wednesday.

Chris Barton, who was at Google from 2004 to 2011, said the company was quick to see the advantage of people using Google search on handheld devices and early versions of smartphones, spurring dramatic growth in the number of Google executives working on deals to win default status with mobile carriers.

Google's clout in search, the government argues, has helped Google, a $1 trillion company, build monopolies in some aspects of online search advertising. Since search is free, Google makes its money through advertising.

The government says the Alphabet Inc (GOOGL.O) unit paid $10 billion annually to wireless companies like AT&T (T.N), device makers like Apple (AAPL.O) and browser makers like Mozilla to fend off rivals and keep its search engine's market share at around 90%.

Barton testified that in negotiating revenue-sharing deals with mobile carriers and Android smartphone makers, Google pressed for its search to be the default and to be exclusive. If Microsoft's search engine Bing was the default on an Android phone, Barton said, then users would have a "difficult time finding or changing to Google."

Barton said on his LinkedIn profile that he was responsible for leading Google's partnerships with mobile carriers like Verizon and AT&T, estimating that the deals "drive hundreds of millions in revenue."

Google attorney John Schmidtlein said in opening arguments on Tuesday that the government was wrong to say that Google broke the law to hold onto its massive market share, noting its search engine was wildly popular because of its quality and that the payments were fair compensation for partners.

The fight has major implications for Big Tech, which has been accused of buying or strangling small rivals but has defended itself by pointing out that its services are free, as in the case of Google, or inexpensive, as in the case of (AMZN.O).

Previous major antitrust trials include Microsoft, filed in 1998, and AT&T, filed in 1974. The AT&T breakup in 1982 is credited with paving the way for the modern cell phone industry, while the fight with Microsoft is credited with opening space for Google and others on the internet.

The government's first witness Tuesday was Google economist Hal Varian, who was asked about discussions inside the company about the importance of scale and of Google becoming the default on home pages.

If Google is found to have broken the law, Judge Amit Mehta, who is deciding the case, will then decide how best to resolve it. He may decide simply to order Google to stop practices he has found to be illegal or he may order Google to sell assets.

Reporting by Diane Bartz, Editing by Nick Zieminski and Richard Chang

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Focused on U.S. antitrust as well as corporate regulation and legislation, with experience involving covering war in Bosnia, elections in Mexico and Nicaragua, as well as stories from Brazil, Chile, Cuba, El Salvador, Nigeria and Peru.

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