Microsoft supports media rules that would share profits with news organizations

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The concept was proposed by Australia and opposed by Google

Microsoft says it would support a government shift to media rules that require big technology corporations to share profits with newspapers when they link to news content. In a new blog post, Microsoft president Brad Smith said his company would be in favor of the profit-sharing concept proposed by Australia. 

“...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,” Smith wrote.

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

Google is against it

Google, on the other hand, strongly opposes the idea. The tech giant went so far as to recently threaten to pull its search engine out of Australia if it’s forced to pay to present links and snippets of news articles. 

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

“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 said. “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.” 

Microsoft says it should be considered

Smith said Google “objects strenuously to what it regards as the injustice of having to engage in baseball arbitration.” He said Google is aware of the fact that there is a “wide gap between what news organizations 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,” Smith said. 

“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 organizations,” he continued. “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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