Microsoft approves, Google opposes new rules to share profits with news organisations

*Australia proposed the concept to tech giants to share profits with the news media organisations but Google has opposed it

Isola Moses | ConsumerConnect

In ensuring fairness to the new media industry by offering the ad revenue it is entitled to, Microsoft says it will support an Australian Government shift to media rules that require big, global technology corporations to share profits with newspapers when they link to news content.

Microsoft President Brad Smith in a new blog post, said his company would be in favour of the profit-sharing concept originally proposed by Australia, reports Bloomberg.

Smith wrote: “We’ve heard from people asking whether Microsoft would support a similar proposal in the United States, Canada, the European Union, and other countries. The short answer is yes.”

Australia’s proposed rules would ensure that the newspaper industry, rather than Google and Facebook, receives the ad revenue it’s entitled to, said Microsoft President.

However, Google strongly opposes the idea of profit sharing with the news organisations for links to their news content.

The tech giant recently went as far as threatening to pull its search engine out of Australia, if it is ‘forced’ to pay to present links and snippets of news articles.

Mel Silva, Google Australia and New Zealand VP, told Australia’s Senate Economics Legislation Committee January 2021, that “the free service we offer Australian users, and our business model, has been built on the ability to link freely between websites.”

“If this version of the Code were to become law it would give us no real choice but to stop making Google Search available in Australia.”

Silva further stated: “We have had to conclude after looking at the legislation in detail we do not see a way, with the financial and operational risks, that we could continue to offer a service in Australia.”

But Microsoft says the proposal for the media rules should be considered.

Smith said Google “objects strenuously to what it regards as the injustice of having to engage in baseball arbitration.”

According to him, Google is aware of the fact that there is a “wide gap between what news organisations are seeking and what Google is prepared to pay.

“Ignoring the fact that an imbalanced bargaining position has created this disparity in the first place, Google in effect asserts that its own inflexibility at the negotiating table means that it should not have to participate in an arbitration that rewards reasonableness over intransigence.

“Unlike Google, if we can grow, we are prepared to sign up for the new law’s obligations, including sharing revenue as proposed with news organisations.”

Microsoft Chief added: “The key would be to create a more competitive market, something the government can facilitate.

“But, as we made clear, we are comfortable running a high-quality search service at lower economic margins than Google and with more economic returns for the press.”

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