TAIPEI (Taiwan News) — Amid an escalating debate between Australia's Parliament and tech gatekeepers over revenue sharing with local news organizations, Microsoft endorsed the Australian proposal and its president, Brad Smith, explained the company's rationale in an open letter.
Smith's 2,000-word letter came before Australia's Parliament debate on Friday (Feb. 12) over a draft bill forcing Google and Facebook to pay for news — the first law of its kind in the world. He said the company supports the legislation and is hoping its endorsement can make a difference, bringing positive change both nationally and internationally.
The 28-year Microsoft veteran added the U.S., equally, should not object to a proposal "that strengthens democracy by requiring tech companies to support a free press," but should instead follow suit.
Smith expressed concern that news organizations are facing a difficult time as search engines and social media giants lure away readers and advertising revenues:
"...news content generates significant indirect value for search and social media sites – as much as $4.7 billion annually for Google, according to one recent study – even though people often do not click through to the original story. This means that news organizations go uncompensated even while all this traffic fuels platforms that have become profitable tech gatekeepers on which businesses must advertise to reach consumers."
Meanwhile, there is a growing risk that more politicians and advocates will exploit the algorithms and business models underlying social media and the internet "to turn disinformation into a new political tactic of choice" while dampening independent and professional journalism.
"While a few of the bigger papers have weathered the storm, most outlets have been hard hit. Since 2000, newsroom revenue in the United States has fallen by 70% and employment has been cut in half. More than 2,000 newspapers have closed entirely. In many places, local news has been decimated. News deserts – communities with no local paper at all – have spread across the country, with terrible effects. As one citizen said poignantly about his Florida town that no longer had a newspaper: “After years without a strong local voice, our community does not know itself.”
Smith wrote that he saw a pressing need for change and recognized the creative solution proposed by Australian Prime Minister Scott Morrison to redress the competitive imbalance between the tech sector and an independent press. Also, the logic behind how and why news content is displayed on Facebook and Google should be made public, he stated.
Operating the world's second-biggest popular search engine after Google, Microsoft is also a beneficiary of the online advertising boom. However, its endorsement of the revenue-sharing proposal targeting tech giants is expected to have an even greater impact on some of its main rivals.
It has been rumored that Google had a phone call with Morrison to soften the government's stance on the issue. The Associated Press reported that a committee has been scrutinizing the bill since it was introduced to Australia's Parliament in December and remains determined to push it through, even though Facebook and Google have both threatened to pull out of the market.
Smith said it was an opportunity "to combine good business with a good cause" and added that Microsoft was ready to sign up for new obligations, reiterating the company would stay in Australia even if Google decided to leave.