Microsoft Wants Facebook and Google to Pay Publishers for News

Across the globe, people generally seem to agree that companies like Google and Facebook have vastly disrupted the way news organizations and news dissemination works, but governments have been slow to respond, so recently Microsoft Corp. endorsed an Australian proposal that would require tech gatekeepers like Facebook and Google to share revenue with local independent news organizations or publishers.

The software giant has reiterated the need for U.S. to also adopt its own version of a proposed Australian law that would force Google and Facebook Inc. to pay publishers for the value their stories generate on the internet giants’ digital platforms. Microsoft’s endorsement followed a statement by Google that it would pull its search service out of the country if the Australian Parliament approves the proposal.

Facebook similarly said that if the proposal is adopted, it would stop Australian users from sharing news on its Facebook and Instagram platforms. Microsoft instead committed that its Bing search service would remain in Australia and that it is prepared to share revenue with news organizations under the rules that Google and Facebook are rejecting.

This has made for an unusual split within the tech sector, and 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. In the blog below, Brad Smith explains why we believe the Australian proposal deserves serious consideration, including in the United States.

“The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press,” Microsoft President and Chief Legal Officer Brad Smith wrote in a blog post Thursday. “It should copy it instead.”

Smith and Microsoft Chief Executive Officer Satya Nadella reached out to Australian Prime Minister Scott Morrison to say they would be happy for the company’s Bing search engine to stay in the country, take market share and pay the fees. Facebook has said it’s considering stopping Australians from sharing news stories on their accounts.

Smith couched Microsoft’s support as a way to promote a healthy news industry and democratic speech, but this could help Microsoft press an advantage in markets where it has failed to make much headway — Bing has less than 5% share in Australia, where Google is dominant.

It’s also not the first time Smith has taken aim at a rival over regulatory issues where Microsoft’s own interests were at stake. Last year he said antitrust regulators should examine Apple Inc.’s App Store policies amid a dispute between the two companies over gaming apps.

Google disputed Smith’s characterization. “We’re not against providing support to the industry,” said Richard Gingras, vice president of news at Google. “The question is, what are we paying for? And are those arrangements structured in a way that is fair and equitable to the full ecosystem of publishers as well as to our commercial deals with those publishers?”

Facebook has a complicated relationship with publishers, which rely on the social network to reach users but also struggle to make money from the service. Facebook has tried different approaches, including a product called Instant Articles where publishers hosted their stories on Facebook’s network in exchange for a cut of ad sales.

In 2018, Australian-born Rupert Murdoch, chairman of News Corp., publicly called on Facebook to start paying news organizations for their work. The proposed Australian law applies to Facebook and Google, so Bing would not pay under its current terms. Microsoft compensates news organizations through licensing deals for MSN and said last year that it has paid out more than $1 billion since 2014.

Google has started paying select media outlets to display curated content on its news app and has set aside more than $1 billion to cover the program’s first three years. Facebook also currently pays some publishers to share stories inside a dedicated News section of its main app. “What is wrong with compensating independent news organizations for the benefits the tech gatekeepers derive from this content?” Smith wrote.

He also encouraged U.S. President Joe Biden’s administration not to intervene with Australia on behalf of Google and Facebook. Citing violent riots in Washington on Jan. 6, Smith argued there’s greater need now for a strong press. “Australia’s proposal will reduce the bargaining imbalance that currently favors tech gatekeepers and will help increase opportunities for independent journalism,” he said. “But this a defining issue of our time, going to the heart of our democratic freedoms.”