The US should copy the new media code instead, Smith said, stressing that he and Microsoft CEO Satya Nadella reached out to Australian Prime Minister Scott Morrison and explained that “even if Google wanted to leave Australia, we would stay”.
Late last month, Google threatened to pull its Search engine from Australia if the proposed media bargaining code, that directs Google and other tech giants to pay news publishers for using their content, goes into effect.
Facebook similarly said that if the proposal is adopted, it would stop Australian users from sharing news on its Facebook and Instagram platforms.
Microsoft instead committed that its Bing search service would remain in Australia and that it is prepared to share revenue with news organisations under the rules that Google and Facebook are rejecting.
“Our endorsement of Australia’s approach has had immediate impact. Within 24 hours, Google was on the phone with the Prime Minister, saying they didn’t really want to leave the country after all. And the link on Google’s search page with its threat to leave? It disappeared overnight,” Smith informed.
“Apparently, competition does make a difference,” he said in a blog post on Thursday.
Microsoft’s Bing search service has less than 5 per cent market share in Australia, substantially smaller than other countries like the US, Canada and the UK.
“But, with a realistic prospect of gaining usage share, we are confident we can build the service Australians want and need. And, unlike Google, if we can grow, we are prepared to sign up for the new law’s obligations, including sharing revenue as proposed with news organisations,” Microsoft President emphasised.
Smith argued that this proposal is needed as since 2000, newsroom revenue in the US has fallen by 70 per cent 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,” he noted.
Democracy has always started at the local level. Today, far too many local communities must nurture democracy without a Fourth Estate.
News content generates significant indirect value for search and social media sites as much as $4.7 billion annually for Google, according to a recent study even though people often do not click through to the original story.
“Dominant tech properties like Facebook and Google will need to invest in transparency, including by explaining how they display news content,” said Smith.