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Microsoft left Google behind in the European news war



Exterior photo of the Microsoft office with glass walls.

Microsoft is strongly supporting an effort in Europe to force large technology companies to pay for the right to link to news articles. Google and Facebook both strongly opposed such proposals in Europe and Australia, calling them an attack on the open network. Microsoft disagrees.

Microsoft vice president Casper Klynge said in a press statement: “Getting fresh, extensive and in-depth news coverage is critical to the success of our democratic country.”

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Specifically, Microsoft is supporting calls for mandatory arbitration rules in Europe, such as those currently under consideration in Australia. Such rules would increase the leverage of news publishers by giving them a way to force technology giants into the negotiating table.

Klynge touted Microsoft’s financial support for journalism in the past and described the Australian-style arbitration system as a “logical next step.”

Google’s offer cannot actually be rejected

In 2019, the European Parliament passed copyright legislation to give news organizations a “neighboring right” to use their news digests, which intensified the pressure on Google Pay for news reports. Such EU-wide laws must be translated into the local laws of each EU country. France is one of the first countries to do so.

In the past, Google only responded to such laws by removing news reports from a certain country from search results. But this time, the French competition authority warned Google that this would be regarded as unfair discrimination and therefore violated the competition law.

As a result, Google had no choice but to pay some licensing fees to news organizations. In Google’s first transaction under the new framework, the search giant promised to pay $76 million to 121 different news organizations within three years.

Despite this, some French news organizations criticized the deal because it made Google too easy to get out of trouble. Now, some people are calling for a stronger legal mechanism to force Google (and possibly other tech giants) to come to power.

In Australia, officials are considering the establishment of a baseball-style arbitration procedure, where each party makes an offer, and then a neutral arbitrator decides which offer is more reasonable. It is widely believed that this arrangement is more beneficial to news organizations because it provides technology giants with the incentive not to delay negotiations or insist on low licensing rates.

“Fair and balanced agreement”

In their new blogs, Microsoft and several European News Groups called on European policymakers to “draw inspiration from Australia’s new legislation, which requires technology gatekeepers covered by the law to share benefits with news organizations.” They said the law “should It is mandatory for these gatekeepers to use the content of news publishers to pay, and arbitration provisions should be included to ensure that negotiations reach a fair agreement.”

Microsoft and publishers said: “Even if news publishers have neighboring rights, they may not have the financial strength to negotiate fair and balanced agreements with these gatekeeper technology companies.” Without protective measures, technical gatekeepers “otherwise may threaten to withdraw from negotiations or completely qiut the market”.

You may hope that Microsoft will pit the American tech giants against European politicians and publishers in the fight alongside Google. However, Google and Microsoft are in very different positions in the search market. Google has more than 90% of the search market share in Australia and many European countries, while Microsoft’s Bing has fallen into a single-digit quagmire. Therefore, the “link tax” proposal will make Google pay far more than Microsoft.

Working with European decision makers can help Microsoft build goodwill there. At the same time, if Google really enables nuclear options and shuts down its search engines in Australia or elsewhere, then this could mean a considerable market share increase for Bing. Therefore, conflicts between Microsoft’s largest search competitor and foreign governments may have even greater disadvantages.


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