Microsoft urges US and EU to follow Australian digital news code

Microsoft is calling for the US and the EU to follow Australia in introducing rules that require technology companies to share revenue with news organisations and support journalism.

The company, which stood against Facebook and Google in supporting the proposal, argues that it is necessary to impose such a levy to create a level playing field between large tech firms and independent media organisations.

In a blogpost, Brad Smith, Microsoft’s president, said that he felt the Australian rule “deserves serious consideration, including in the United States”.

“Democracy has always started at the local level. Today, far too many local communities must nurture democracy without a fourth estate,” Smith wrote. “As we know from our own experience with Microsoft’s Bing search service, access to fresh, broad and deep news coverage is critical to retaining strong user engagement.”

Australia’s proposal requires large technology companies to not only pay a fee for news content they use or link to, but to agree to partake in arbitration to determine that fee. In response, Facebook and Google threatened to pull services from the country, while Microsoft took the opposite tack: eagerly stepping up to promote Bing, which currently has fewer than one in 20 searches in Australia, as an alternative.

“Our endorsement of Australia’s approach has had immediate impact,” Smith argued. “Within 24 hours, Google was on the phone with the prime minister, saying they didn’t really want to leave the country after all. And the link on Google’s search page with its threat to leave? It disappeared overnight. Apparently, competition does make a difference.”

Google reportedly watered down its threat after a conversation with the Australian PM, Scott Morrison.

Smith says the change in US government could be a chance for Washington to switch its position. “Facebook and Google persuaded the Trump administration to object to Australia’s proposal. However, as the United States takes stock of the events on January 6 [the attack on the Capitol in Washington], it’s time to widen the aperture.

“The ultimate question is what values we want the tech sector and independent journalism to serve. Yes, Australia’s proposal will reduce the bargaining imbalance that currently favours tech gatekeepers and will help increase opportunities for independent journalism. But this a defining issue of our time that goes to the heart of our democratic freedoms.”

Microsoft’s support for the proposals is rare in the technology sector, however. More representative is Sir Tim Berners-Lee, the inventor of the web, who said last month that the plans “would undermine the fundamental principle of the ability to link freely on the web”.

“If this precedent were followed elsewhere it could make the web unworkable around the world,” he told an Australian Senate inquiry on the bill. “I therefore respectfully urge the committee to remove this mechanism from the code.”


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