Microsoft throws Google under the bus in European news fight

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An offer Google can’t refuse —

Google has blasted “link tax” proposals as antithetical to the open Web.


Exterior photograph of a glass-walled Microsoft office.

Microsoft is throwing its weight behind a European effort to force Big Tech companies to pay for the right to link to news articles. Google and Facebook have strongly opposed such proposals in both Europe and Australia, describing them as an attack on the open Web. Microsoft disagrees.

“Access to fresh, broad, and deep press coverage is critical to the success of our democracies,” said Microsoft Vice President Casper Klynge in a press statement.

Specifically, Microsoft is supporting calls for Europe to adopt a mandatory arbitration rule like the one now under consideration in Australia. Such a rule would increase the leverage of news publishers by giving them a way to force technology giants to the bargaining table.

Klynge touted Microsoft’s past financial support for journalism and described an Australia-style arbitration mechanism as “a logical next step.”

An offer Google literally can’t refuse

Pressure on Google to pay for news articles intensified in 2019 when the EU parliament passed copyright legislation giving news organizations a “neighboring right” over the use of snippets from their articles. EU-wide laws like this must be translated into the local law of each EU nation. France was one of the first countries to do this.

In the past, Google has responded to laws like this by simply delisting a country’s news articles from its search results. But this time, French competition authorities warned Google that would be considered unfair discrimination and hence a violation of competition laws.

As a result, Google had little choice but to pay some licensing fees to news organizations. In Google’s first deal under the new framework, the search giant committed to pay $76 million over three years to 121 different news organizations.

Still, some French news organizations blasted that deal as letting Google off the hook too easily. And now, some are calling for an even stronger legal mechanism to force Google—and possibly other tech giants—to the table.

In Australia, officials are considering establishing a baseball-style arbitration process where each party puts forward an offer and then a neutral arbiter decides which offer is more reasonable. This arrangement is widely viewed as more favorable to news organizations, since it gives technology giants an incentive not to drag out negotiations or insist on low licensing rates.

“Fair and balanced agreements”

In their new blog post, Microsoft and several European news groups call on European policymakers to “take inspiration from the new Australian legislation that requires the tech gatekeepers covered by that law to share revenue with news organizations.” They say that the law “should mandate payments for the use of press publishers’ content by these gatekeepers and should include arbitration provisions, to ensure that fair agreements are negotiated.”

“Even though press publishers have a neighboring right, they might not have the economic strength to negotiate fair and balanced agreements with these gatekeeper tech companies,” Microsoft and the publishers say. Without protections, tech gatekeepers “might otherwise threaten to walk away from negotiations or exit markets entirely.”

You might expect Microsoft to stand shoulder-to-shoulder with Google in a fight that pits American tech giants against European politicians and publishers. But Google and Microsoft are in very different positions in the search market. Google has upward of 90 percent search market share in Australia and a number of European countries, while Microsoft’s Bing is mired in the single digits. So “link tax” proposals are going to cost Google far more than Microsoft.

Siding with European policymakers could help Microsoft build goodwill there. Meanwhile, if Google were to actually invoke the nuclear option and shut down its search engine in Australia or elsewhere, it could mean big market share gains for Bing. So stoking conflict between its biggest search rival and foreign governments may have a lot more upside than downside for Microsoft.

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