Microsoft would like the US government to adopt media rules that would force big tech companies to share profits with newspapers when they link to news content, according to a new blog post from Microsoft’s chairman, Brad Smith. And the whole concept is controversial, to say the least.
The idea of profit sharing, which has been proposed in Australia, has not been well received by companies like Google, which has threatened to block searches if the new media rules are finalized and implemented. But Microsoft thinks it’s a great idea that deserves serious consideration in the US.
“… We have heard people ask if Microsoft would support a similar proposal in the United States, Canada, the European Union and other countries. The short answer is yes, ”the introduction to Microsoft’s blog post. read.
Specifically, Smith seems to like what is called “baseball arbitration” to determine the fair price that newspaper publishers should get for the content they produce. Under Australia’s proposed media rules, an arbitrator would force major newspapers and tech giants like Google and Facebook to sit down and calculate a fair price to compensate media outlets based on the content they produce.
The theory is that Google and Facebook are getting that content for free and they shouldn’t be able to eat the lunch of the newspaper industry by taking all the ad revenue generated by someone else.
From Smith’s blog post:
Google strongly opposes what it considers to be the injustice of having to participate in baseball umpiring. Argues that this type of arbitration is appropriate only “when the parties are already close to price.” On the contrary, according to Google, there is a huge gap between what news organizations are looking for and what Google is willing to pay. Ignoring the fact that an unbalanced bargaining position has created this disparity in the first place, Google in effect claims that its own inflexibility at the negotiating table means that it shouldn’t have to engage in arbitration that rewards reasonableness over intransigence.
Microsoft’s Bing search service has less than 5% market share in Australia, substantially less than the 15-20% market share we have for PC and mobile searches in the United States and 10-15 % of participation that we have in Canada and United States Kingdom. But, with a realistic prospect of gaining user share, we are confident that we can create the service Australians want and need. And, unlike Google, if we can grow, we are prepared to subscribe to the obligations of the new law, including the distribution of income as proposed with news organizations. The key would be to create a more competitive market, something that the government can facilitate. But, as we made clear, we are comfortable running a high-quality search service with lower margins than Google and with more economic benefits for the press.
Smith makes some very strange comments in the post, completely unrelated to Australia’s proposed media laws. For example, Smith hints that Russia invented disinformation in 2016, which is an absolutely absurd notion.
From Smith’s post, emphasis added:
On the one hand, the Internet and social networks have unfortunately become powerful engines of disinformation and disinformation. First started by the Russian government in the 2016 American elections, the disease of disinformation has now spread much more widely. Without new and greater restrictions, there is a growing risk that more politicians and advocates will exploit the algorithms and business models underlying social media and the Internet to turn disinformation into a new political tactic of choice.
It goes without saying that Russia did not invent disinformation, much less disinformation online. But strange tangents aside, Microsoft has clearly planted its flag against monopoly power in pursuit, a fun throwback for anyone who remembers Microsoft as the bad guy during the 1990s antitrust lawsuits with the US government.
What happens if Google blocks all searches in Australia? The country’s Prime Minister Scott Morrison says there is always bing. Morrison has been in talks with Microsoft to meet the challenge and fill the search gap if Google takes its ball and goes home. But Australians are skeptical that it’s that easy.
Google search has a market share of about 95% in Australia, as Smith points out, a higher percentage than even most Western countries like the US, where Google has an estimated market share of 62%. , if you can believe it. But Bing just isn’t considered as trustworthy as Google. There is a reason why “google” has become a generic term for Internet search and “bing” has not.
Where will the debate go from here? No one knows for sure. But Australia is holding firm, which could set a precedent for other countries. The precedent could be a country completely dependent on Bing, or it could be a precedent where Google collapses and is forced to come to the negotiating table. Either way, it will be interesting to observe whether the Biden administration is inspired or not.