Microsoft helps Australia after Google threatened to withdraw its search
Satya Nadella (R), Chief Executive Officer of Microsoft Corp., speaks as Brad Smith, President and Chief Legal Officer, attends the Microsoft AGM on November 30, 2016 in Bellevue, Washington.
Jason Redmond | AFP | Getty Images
Microsoft said Wednesday it would never threaten to leave Australia after Google proposed pulling its widely used search engine out of the country.
Google made the threat last month after the Australian government proposed a new law that would force the tech giant to pay news publishers for the right to link to their content.
“One thing is clear: while other technology companies sometimes threaten to leave Australia, Microsoft will never pose such a threat,” said Brad Smith, president of Microsoft, in a statement.
“We are committed to national security and the country’s economic success.”
Google didn’t immediately respond to a CNBC request for comment.
Microsoft is well positioned to capitalize on the impact between Google and Australia. According to web analytics firm StatCounter, Google currently dominates search in the country, holding a 94.5% market share, while Microsoft holds Bing just 3.6%.
Smith said he and Microsoft CEO Satya Nadella spoke to Australian Prime Minister Scott Morrison last week, who recently told reporters that Australia “did not respond to threats”.
The tech veteran said Microsoft supported Australia’s plan to make digital platforms like Google and Facebook pay for news, adding that it was “vital to the country’s democracy.”
“Microsoft recognizes that the media sector and public-interest journalism are currently facing many challenges from the digital age, including changing business models and evolving consumer preferences,” said Smith.
“For this reason, Microsoft has long supported the efforts of the Australian Competition and Consumers Commission (ACCC) to analyze these problems and to propose first solutions worldwide,” he said.
Australia is well on its way to passing laws that would encourage tech giants to negotiate payments with local publishers and broadcasters for content featured in search results or newsfeeds. If they can’t reach an agreement, a government-appointed arbitrator will decide the price.
The proposed new law in Australia is known as the News Media Negotiation Code and is specifically aimed at Google and Facebook. The couple generate a greater portion of their revenue from displaying digital advertisements alongside news than Microsoft.
Google has been harshly against the code, calling it “unreasonable” and “impractical”.
Mel Silva, executive director of Google Australia and New Zealand, told an Australian Senate committee last month: “Given the unmanageable financial and operational risk if this version of the Code becomes law, we will have no choice but to quit.” Make Google search available in Australia. “
But Smith said: “The Code is sensibly trying to address the imbalance in bargaining power between digital platforms and Australian news companies.”
“It also recognizes the vital role search plays not just for consumers but for thousands of Australian small businesses who rely on search and advertising technology to fund and support their organizations,” he added. “While Microsoft is not subject to the laws currently pending, we would be willing to comply with those rules if the government determines us.”