Once upon a time, Microsoft was popularly considered a marauding monopoly that wanted to dominate the world of information technology, personal computing, and the internet.
It is with some irony, then, that those of us who have been around for some time are now observing Microsoft’s new stance on the groundbreaking media code that the Australian Government wants to introduce. It allows the big tech companies to negotiate to pay news organizations for their content.
While Google continues to push back against the proposal and is threatening to quit Australia altogether (with its search engine, but not other products), it has emerged that Microsoft is happy to accept the code and cut a deal.
Microsoft promised to invest in its Bing search engine and make it more competitive against the dominant Google. Users will not notice any difference if Google takes its browser and goes home.
The flame spreads
In recent days, the same issue has emerged in Canada. Here, an umbrella group of media organizations is calling on their legislators and regulators to copy the Australian example.
Last week, News Media Canada started a campaign called Disappearing Headlines, leaving front pages of papers across the country to protest against tech giants not paying for news content.
An editorial in the Toronto Star said the news was “under attack” from Google and Facebook.
“Without reliable, trusted journalism that informs you and keeps our governments accountable, our democracy and the future of our children will suffer,” it read.
“It costs real money to report trusted, fact-based news. Unfortunately, global tech giants such as Google and Facebook refuse to pay a fair price for content created by Canadian news outlets. At the same time, these titans drain off more than 80% of all digital advertising revenue in Canada.”
In Australia, competition watchdog the Australian Competition and Consumer Commission has published a draft law that proposes forcing the tech companies to pay media publishers in exchange for their content.
According to ACCC chairman Rod Sims, the changes are needed to “address a significant bargaining power imbalance” between digital and media publishers.
“A healthy news media is essential to a well-functioning democracy,” said Sims.
While many media companies have struggled, Google Australia is in excellent health.
The company made AUD 4.8 billion in revenue. This included AUD 4.3 billion in advertising, Some of which appeared through the Google platform on web pages created by the media companies and carrying journalism they paid staff to create.
All this has been going on since August last year. Despite meetings that have gone as high as Australian Prime Minister Scott Morrison, there is still no resolution in sight – only a willingness from Microsoft to break with its peers and accept the code.
There is a lot at stake, Microsoft’s Bing only has around 3% of the search engine market and is in second place; Google has 93%. So, is this just cynicism of a different kind from Microsoft, which sees a fresh market opportunity and is happy to play ball with regulators to claw back some market share?
For the smaller guys
If Google has to pay Australian news organizations for content, estimates of the cost range from millions to billions.
But if they pull out of Australia, they’ll also lose the clicks and eyeballs they get from the relationships with customers.
Then there are smaller content producers who may not be news organizations but still have content they want to get out to views through search and YouTube.
Google’s argument is that these people won’t be served by the proposed code, which will best serve large media organizations such as Rupert Murdoch’s News Corporation (which ironically reported its best profits in years last week.)
Last week, Google announced it had negotiated deals with smaller news outlets and content makers to Google Showcase, where they pay publishers to curate content for “story panels” for readers. Whether this is a “divide and rule” approach remains to be seen.
Also uncertain is where any compromise will go because the smart money is on both the Australian Government and Google bending a little. Some even believe that Google could sue the Government for billions — if it is forced out.
After all, as everyone says, the internet is an eco-system, and everybody who uses it goes there for something different. So, it means compromises and a re-balancing in the economics of power.
Meanwhile, Australian consumers — all corporates which are not large media organizations — are pondering life without Google.
Microsoft might be prepared to fill the void. Still, my Facebook feed has been full of comments from friends about DuckDuckGo for the last few weeks, which has the advantage of being “privacy protected” and an alternative to Google.
In 2021, it is clear the internet is undergoing a crisis born of its own astonishing growth and success. We face issues concerning privacy, free speech, hate speech, surveillance, and crude economics.
We now have the journalism crisis and how old media has been chewed up and destroyed by big tech, which has grown faster than regulators or the media company business models can keep up.
Where this is going, who knows. But I’ll be keeping my eyeballs on it, regardless of what search engine I use.
However, one point to make is that what is happening in Australia right now has global implications.
If Google blinks and cuts a deal in Australia, you can be sure that publishers worldwide will be expecting the same.
Image credit: iStockphoto/marchmeena29