Microsoft Urges U.S. to Make Tech Giants Pay for News
By Mike Cherney
SYDNEY -- Microsoft Corp. said the U.S. should copy Australia's
controversial proposal that tech companies pay newspapers for
content -- putting it at odds with Alphabet Inc.'s Google and
It isn't the first time Microsoft has stepped into feuds
involving rivals -- particularly in areas where they have an edge.
Its Bing search engine lags behind Google in market share.
Microsoft has urged governments to better regulate
facial-recognition technology and last year sided with a videogame
developer against Apple Inc. in a dispute about app-store fees.
The Australian proposal, if enacted into law -- it is now before
a parliamentary committee -- could prompt other countries to follow
suit in a global transformation of the relationship between tech
companies and traditional media.
Some countries, particularly in Europe, have tried to force tech
companies to pay publishers, often with little success. Australia's
effort gained momentum last year, when the pandemic-driven downturn
further strained the finances of media companies.
"The United States should not object to a creative Australian
proposal that strengthens democracy by requiring tech companies to
support a free press," Microsoft President Brad Smith wrote in a
blog post published Thursday. "It should copy it instead."
The Australian proposal would effectively require publishers and
tech companies to negotiate, and submit to binding arbitration if
they can't reach a deal. It would also require tech companies to
notify publishers of algorithm changes that could affect search
The Trump administration opposed the proposal, objecting to its
applying first to two U.S. companies and to some specifics of the
arbitration process, which it said would favor the news companies.
Microsoft's Mr. Smith said the Biden administration should
"At the end of the day, what is wrong with compensating
independent news organizations for the benefits the tech
gatekeepers derive from this content?" Mr. Smith wrote. Although
the Australian law wouldn't initially apply to Microsoft, he said
the company is prepared to sign up to the new law's obligations and
share revenue as proposed with news organizations.
Google and Facebook have argued that the proposal would set an
unmanageable precedent, given that the internet is based on free
sharing of links. If the proposal becomes law in its current form,
Google has said it would shut down its search engine in Australia,
and Facebook has said it would bar Australian users on its
social-media platforms from sharing links to news articles.
The two companies have said they want to invest in local
publishers, and point to recent deals to show they and news
companies can negotiate fair compensation. They also argue the
publishers benefit by having links to their content appear in
search results and social media because it sends users directly to
Google executives have said that Australia's proposal should be
narrowed to apply to a new product called News Showcase, rather
than search results. News Showcase offers curated panels of news
that appear on Google services, with Google paying publishers for
content. The company has said an arbitrator could be called in if
there are any disagreements involving that product.
This week, Google expanded News Showcase to the U.K. and
Argentina, after last week launching in Australia, where it says
seven publishers have signed up. Globally, it has committed $1
billion to the product over the next three years.
"This adds to the hundreds of deals we've signed in a dozen
countries around the world -- and with the positive comments from
publishers and policy makers, demonstrates that Showcase is an
attractive solution that supports a strong future of news," said
Lucinda Longcroft, Google's government affairs director in
But some publishers in Australia, including the local subsidiary
of News Corp, owner of Wall Street Journal publisher Dow Jones
& Co., have argued that Google and Facebook wield so much
market power that they have no incentive to negotiate. They say
tech giants pay nothing for content, but collect ad revenue based
on visits to their sites and increase their traffic by including
links to news articles.
The tech giants' lobbying efforts have increased in recent days,
ahead of the parliamentary committee's report, due Friday. In the
weeks that follow, lawmakers could vote on the legislation, which
could be changed along the way.
Senior Australian officials have said they have recently talked
to Facebook Chief Executive Mark Zuckerberg, Alphabet Chief
Executive Sundar Pichai and Microsoft Chief Executive Satya
"I thought it was a constructive meeting," Prime Minister Scott
Morrison said of his talks with Mr. Pichai this month. "We have
been able to get that into a much more positive space about the
ability to continue to provide services here in Australia."
Google and Facebook aren't the only ones expressing concern
about the Australian proposal. Tim Berners-Lee, a computer
scientist credited with inventing the World Wide Web, said in a
parliamentary submission that by requiring payment for linking
content online, the law "risks breaching a fundamental principle of
Write to Mike Cherney at firstname.lastname@example.org
(END) Dow Jones Newswires
February 11, 2021 13:14 ET (18:14 GMT)
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