US alleges Google got rich because people stick with search defaults

By Diane Bartz

WASHINGTON (Reuters) – The Justice Department will press its argument Thursday that Google sought to strike agreements with mobile carriers to win powerful default positions on smartphones to dominate search in an antitrust trial that could change the future of the internet.

The government will wrap up questioning Thursday of Antonio Rangel, who teaches behavioral biology at the California Institute of Technology. Other witnesses will be James Kolotouros, for Google, and Brian Higgins, from Verizon Communications.

The government says the Alphabet Inc unit paid $10 billion annually to wireless companies like AT&T, device makers like Apple and browser makers like Mozilla to fend off rivals and keep its search engine market share near 90%.

The government has also alleged that Google illegally took steps to protect communications about the payments.

The government called witnesses on Tuesday and Wednesday to show that Google, as far back as the mid-2000s, sought to attract a large number of search queries by winning default status on mobile devices. Another witness, Rangel, discussed how powerful default status was, although data he used to show this was largely redacted.

Google’s clout in search, the government alleges, has helped Google build monopolies in some aspects of online search advertising. Search is free so Google makes money through advertising.

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, suggesting that its search engine was wildly popular because of its quality and that the payments were fair compensation for partners.

If Google is found to have broken the law, U.S. District 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.

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

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.

(Reporting by Diane Bartz; Editing by Mark Potter)