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Microsoft endorses Australia’s proposal on technology and the news

Microsoft president Brad Smith is calling on the new Biden Administration in the United States to follow Australia's lead on the News Media Bargaining Code.

Smith says the United States needs to consider adopting proposals like those currently under consideration in Australia that aim to level the playing field between digital platforms and news publishers and seek to ensure a bigger and fairer share of online revenue for news organisations.

In a new blog post, Smith highlights the importance of strong, independent journalism to a functioning democracy, and emphasises the impact that technology has had on news organisations, including local news. 

The blog highlights Google's new batch of private proposals to news publishers that conditioned an offer to pay more money on explicit provisions allowing Google to terminate any deals it strikes if the governments proposed digital media regulation is not revised are described as an extraordinary manoeuvre.

For the past two years, Google and Facebook have successfully urged officials in Washington and in the former Trump Administration to object to Australia's News Media Bargaining Code.

Smith says Microsoft is supportive of the baseball arbitration proposed by the Code and believes that Google's alternative would result in a slow and legalistic process benefitting those with deep pockets.

"Google and Facebook's threat to tamp down their services or pull out of a country entirely creates a new vulnerability for democracies and underscores the need for new rules for digital markets," he says.

This follows a statement from Microsoft last week in support of the News Media Bargaining Code.

"Last week, Microsoft CEO, Satya Nadella, and I spoke with Prime Minister Scott Morrison and Communications Minister Paul Fletcher about the Government’s proposed way of addressing the current bargaining power imbalance between digital platforms and Australian news businesses," Smith said at the time. 

During that conversation, Smith said thet made the following points:

  • Microsoft is committed to Australia and the news publishers that are vital to the country’s democracy.
  • Microsoft recognises that the media sector and public interest journalism currently face many challenges from the digital era, including changing business models and evolving consumer preferences. That is why Microsoft has long supported the Australian Competition and Consumer Commission’s (ACCC) efforts to analyse these issues and propose world-first solutions.
  • Microsoft fully supports the News Media Bargaining Code. The code reasonably attempts to address the bargaining power imbalance between digital platforms and Australian news businesses. It also recognises the important role search plays, not only to consumers but to the thousands of Australian small businesses that rely on search and advertising technology to fund and support their organisations. While Microsoft is not subject to the legislation currently pending, we’d be willing to live by these rules if the government designates us.
  • Microsoft will ensure that small businesses who wish to transfer their advertising to Bing can do so simply and with no transfer costs.  We recognise the important role search advertising plays to the more than two million small businesses in Australia.
  • We will invest further to ensure Bing is comparable to our competitors and we remind people that they can help, with every search Bing gets better at finding what you are looking for.
  • We believe that the current legislative proposal represents a fundamental step towards a more level playing field and a fairer digital ecosystem for consumers, business, and society.

"One thing is clear: while other tech companies may sometimes threaten to leave Australia, Microsoft will never make such a threat," Smith said. 

"We appreciate what Australia has long meant for Microsoft’s growth as a company, and we are committed to supporting the country’s national security and economic success."