Microsoft backs Facebook criticized Australian media laws; Aims to tap the opportunity

The American tech giant Microsoft said it fully supported proposed new laws in Australia that would force internet giants Google and Facebook to pay domestic media outlets for their content.

“While Microsoft is not subject to the legislation currently pending, we’d be willing to live by these rules if the government designates us,” the software firm said in a statement. “The code reasonably attempts to address the bargaining power imbalance between digital platforms and Australian news businesses.”

Proposed law

Under the proposed News Media Bargaining Code, Google and Facebook would be required to negotiate payments to individual news organizations for using their content on the platforms. If agreement cannot be reached on the size of the payments, the issue would go to so-called “final offer” arbitration where each side proposes a compensation amount and the arbiter chooses one or the other.

Australia’s biggest media companies, Rupert Murdoch’s News Corp and Nine Entertainment, have said they think the payments should amount to hundreds of millions of dollars per year.

Google and Facebook, backed up by the US government have said the scheme would seriously undermine their business models and the very functioning of the internet. They even threatened to withdraw some key services from Australia if the regulations went ahead.

Facebook told a Senate inquiry into the proposed code that it would stop letting users post links to Australian news if it becomes law. Facebook CEO Mark Zuckerberg called Australian officials last week to lobby against the measure.

News organizations worldwide have seen their businesses ravaged by the loss of advertising revenue that once flowed to their newspapers but are now overwhelmingly captured by the big digital platforms.

Microsoft to the rescue

The country’s Prime Minister, Scott Morrison, said recently that Microsoft was ready to step in and expand its search product Bing in Australia if Google pulls its search engine, after he spoke with Microsoft Chief Executive Satya Nadella last week.

Microsoft in its statement said it will offer small firms a chance to transfer advertising business to Bing with no costs and that it would invest further in the product to ensure it is competitive.

Google and Facebook declined to offer any comments about the matter.