Microsoft throws Google under the bus in European news brawl

Microsoft is supporting a European effort to force big tech companies to pay for the right to link to news articles. Google and Facebook have strongly opposed such proposals in both Europe and Australia, describing them as an attack on the open web. Microsoft disagrees.

“Access to new, comprehensive and in-depth press coverage is critical to the success of our democracies,” Microsoft Vice President Casper Klynge said in a press release.

Specifically, Microsoft supports calls for Europe to adopt a mandatory arbitration rule like the one now being considered in Australia. Such a rule would increase the influence of news publishers by giving them a way to force the tech giants to come to the negotiating table.

Klynge touted Microsoft’s past financial support for journalism and described an Australian-style arbitration mechanism as “the logical next step.”

An offer that Google literally can’t refuse

Pressure on Google to pay for news articles intensified in 2019 when the EU parliament passed copyright legislation that gives news organizations a “neighboring right” to use excerpts from their articles. EU laws like this must be translated into the local legislation of each EU nation. France was one of the first countries to do this.

In the past, Google has responded to laws like this by simply removing a country’s news articles from its search results. But this time, the French competition authorities warned Google that it would be considered unfair discrimination and therefore a violation of competition laws.

As a result, Google had no choice but to pay some licensing fees to news organizations. In Google’s first deal under the new framework, the search giant promised to pay $ 76 million over three years to 121 different news organizations.

Still, some French news organizations criticized that deal for letting Google get off the hook too easily. And now, some are calling for an even stronger legal mechanism to force Google, and possibly other tech giants, to participate.

In Australia, officials are considering establishing a baseball-style arbitration process in which each party submits an offer and then a neutral arbitrator decides which offer is most reasonable. This arrangement is widely seen as more favorable to news organizations, as it gives the tech giants an incentive not to delay negotiations or insist on low license fees.

“Fair and balanced agreements”

In its new blog post, Microsoft and several European newsgroups ask European legislators to “take inspiration from the new Australian legislation that requires technology gatekeepers covered by that law to share revenue with news organizations.” They assert that the law “should require payments for the use of press editorial content by these gatekeepers and should include arbitration provisions to ensure fair deals are negotiated.”

“Although news publishers have a related right, they may not have the financial strength to negotiate fair and balanced deals with these controlling technology companies,” say Microsoft and the publishers. Without protections, the guardians of technology “could threaten to walk away from negotiations or exit the markets altogether.”

Hopefully Microsoft will stand shoulder to shoulder with Google in a fight that pits the US tech giants against European politicians and publishers. But Google and Microsoft are in very different positions in the search market. Google has more than 90 percent share of the search market in Australia and several European countries, while Microsoft’s Bing is stuck in the single digits. Therefore, the “link tax” proposals will cost Google much more than Microsoft.

Siding with European lawmakers could help Microsoft build goodwill there. In the meantime, if Google really invoked the nuclear option and shut down its search engine in Australia or elsewhere, it could spell big market share gains for Bing. Therefore, stoking the conflict between its biggest search rival and foreign governments may have more advantages than disadvantages for Microsoft.

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