Microsoft throws its weight behind a European effort to force Big Tech companies to pay for the right to switch to news articles. Google and Facebook strongly opposed such proposals in both Europe and Australia, describing them as an attack on the open web. Microsoft does not agree.
“Access to fresh, broad and in-depth press releases 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 such as the one currently being considered in Australia. Such a rule would increase the leverage of news publishers by giving them a way to force technology giants to the negotiating table.
Clusters viewed Microsoft’s previous financial support for journalism and described an arbitration mechanism in Australia as a logical next step. ‘
An offer that Google literally cannot refuse
The pressure on Google to pay for news articles increased in 2019 when the European Parliament passed copyright law, giving news organizations a ‘neighboring right’ to use extracts from their articles. EU-wide laws such as these must be translated into the local legislation of each EU country. France was one of the first countries to do so.
In the past, Google has responded to such laws 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 little choice but to pay licensing fees to news organizations. In Google’s first transaction under the new framework, the search giant pledged to pay $ 76 million over three years to 121 different news organizations.
Nevertheless, some French news organizations have said that Google is getting it 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 the table.
In Australia, officials are considering instituting a baseball-style arbitration process where each party submits an offer and then a neutral arbitrator decides which offer is more reasonable. This arrangement is generally considered to be more favorable for news organizations, as it encourages technology giants not to delay negotiations or to insist on low licensing rates.
“Fair and balanced agreements”
In their new blog post, Microsoft and several European newsgroups call on European policymakers to “draw inspiration from the new Australian legislation that requires the technical gatekeepers covered by the law to share revenue with news organizations.” They say the law “should provide for the use of the content of press publishers by these gatekeepers and that it should include arbitration clauses to ensure fair agreements are negotiated.”
“While press publishers have a neighboring right, they may not have the economic power to negotiate fair and balanced agreements with these gatekeeping technology companies,” say Microsoft and the publishers. Without protection, technological gatekeepers could “otherwise threaten to walk away completely from negotiations or leave the market.”
You can expect Microsoft to stand shoulder-to-shoulder with Google in a battle that American technology giants are taking on European politicians and publishers. But Google and Microsoft are in very different positions in the search market. Google has a 90 per cent search in Australia and a number of European countries, while Microsoft’s Bing is caught in the single digits. Proposals for “link tax” will therefore cost Google much more than Microsoft.
If the European policymakers are teamed up, it could help Microsoft build goodwill there. Meanwhile, if Google were to turn on the core option and close its search engine in Australia or elsewhere, it could mean huge market share gains for Bing. So the offensive conflict between its biggest rival in search and foreign governments could be far more upside down than the downside for Microsoft.