Microsoft has thrown its full support behind the federal government’s media bargaining code, positioning its own search service as able to fill the void left by Google’s proposed withdrawal and publicly rebuking its tech rival for its threat to leave Australia.
In a significant public statement on Wednesday afternoon, Microsoft president Brad Smith confirmed he had spoken with Prime Minister Scott Morrison along with Microsoft chief executive Satya Nadella, and that the company supported the media bargaining code and is actively preparing to improve its service if Google does leave Australia.
Legislation introducing a bargaining code between Facebook and Google and Australian media companies which would require final offer arbitration to determine revenue-sharing deals between the two sides is currently the subject of a Senate inquiry and is likely to be debated in Parliament later this month.
Google recently threatened to withdraw its search services from Australia if the code is implemented, while Facebook earlier said it may block all Australian news content from its platform in response.
But Mr Smith said Microsoft would happily abide by the code if it were to be designated by the government, and that the company is readying to invest further in Bing to bring it up to Google’s standard, and plans to allow small businesses to transfer advertising to the service for free.
“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,” Mr Smith said in the statement sent to the media.
“While Microsoft is not subject to the legislation currently pending, we’d be willing to live by the 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 will invest further to ensure Bing is comparable to our competitors.”
The tech giant also took a swipe at Google for its threat to leave Australia in response to the code.
“While other tech companies may sometimes threaten to leave Australia, Microsoft will never make such a threat. 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,” Mr Smith said.
It comes as the federal government and department officials are actively preparing for Google to pull its search engine from Australia in response to the code, with Mr Morrison and a series of ministers already trying to sing the virtues of Bing as a potential replacement.
In a statement to InnovationAus, Communications Minister Paul Fletcher pointed to alternative search engines and that Google’s withdrawal would be an “attractive commercial opportunity for those players to expand their presence here”.
“We have made it clear that we would prefer them to remain in Australia. What we have been doing is following a structured public policy process, based upon the digital platforms inquiry conducted by the ACCC over about 18 months,” Mr Fletcher said.
“We’ll make a public policy decision on the merits, particularly on the basis of the market power of the digital players in the news market, and the competition policy issues that follow from that.”
Treasurer Josh Frydenberg said that Microsoft is “watching this very closely” and “no doubt see opportunities here in Australia to expand”.
At a public hearing for the senate inquiry, Treasury officials confirmed they have been tasked with conducting modelling and analysis on the prospect of the big tech companies taking these drastic actions.
“It’s not entirely clear what the breadth of actions they may consider are – there is a range of actions they may take. We’ve looked at the possibility of the actions, what the implications might be in a general sense, but exactly what they will do and when will need more analysis,” a Treasury official told the inquiry.
“The implications are very different, they’re very different services and different parts of the sector would be affected.”
The Greens have put forward a very different proposal for if Google does leave the country, suggesting that there should be a publicly-owned and funded search engine in Australia.
“The government needs a plan for how Australians will continue to be able to access essential information online if Google Search were to be taken offline. We need an independent search engine that is run in the public interest not for the profit of a corporate giant,” Greens media spokesperson Sarah Hanson-Young said.
“A publicly-owned search engine that is accountable to the public and not shareholders would be able to be set up with global best practice data privacy standards to ensure users own their own data and have control over what data is collected on them and how it is used.
“Like the ABC, a public search engine should be independent of the government of the day and be there to provide access to information for all Australians.”
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