Microsoft Urges U.S. Adoption of Google, Facebook Revenue Sharing

Microsoft says Australian proposal requiring Internet gatekeepers to share revenue with local news organizations should be expanded to protect democracy.
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Microsoft says it would support worldwide expansion of Australia's proposal to require Internet gatekeepers such as Facebook  (FB) - Get Report and Alphabet  (GOOGL) - Get Report to share revenue with local news organizations.

The comments came in a blog post by Microsoft president Brad Smith Thursday discussing a proposal under consideration in Australia that would require compensation negotiations and, if necessary, arbitration to reach agreement on payment terms.

"The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press. It should copy it instead," Smith wrote. 

He cited studies showing that Google captures $4.7 billion a year in uncompensated benefit from its crawling and distribution of news content. He also noted that U.S. newsroom revenue has fallen 70% since 2000.

Google has said it will withdraw its search service from Australia if the government passes the proposal. And Facebook said it will stop Australian users from sharing news on its Facebook and Instagram platforms if the measure goes into effect.

Smith noted that Facebook and Google had "persuaded the Trump administration to object to Australia’s proposal," but that that needs to reconsidered in light of Trump's use of social media to spread disinformation about the election and to incite the Jan. 6 assault on Congress as the electoral votes were being counted.

Microsoft's support of the Australian plan, announced last week, is not exactly a shocker, given that Facebook and Google are almost completely dependent on advertising for their revenue, while Microsoft’s ad revenue is very small in comparison. Microsoft shares money with news outlets through licensing deals for MSN and said last year that it has doled out more than $1 billion since 2014, Bloomberg reported.

Microsoft "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,” the company wrote in a blog post.

“At Microsoft, we started 2020 by listing our policy priorities and saying that ‘technology needs to give the news business a boost,’” he wrote. “In October, we launched a new initiative to invest in and support local news and, through Microsoft News, we have been sharing a large portion of revenue with news publishers. In the hunt for better ideas, Google’s threat to boycott an entire country got our attention.”

Microsoft recently traded at $243.01, up 0.08%. Alphabet and Facebook shares fell fractionally.

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