Microsoft, speaking with Bloomberg, continues to position itself as a champion of traditional news while calling for government action against Google. In the interview, Microsoft claims Google is actively working against traditional media and possibly harming the democratic process.
According to Brad Smith, Microsoft’s president and chief legal counsel, Google is monopolizing news and controlling traditional outlets:
“The reality is that Google has fundamentally sucked most of the oxygen out of the opportunities for people who create content to actually earn a living through advertising,” says Smith. “It’s interesting to just look at what has happened to what was supposed to be an open web — that was the promise of the internet.”
Smith points out how much damage has been caused to traditional media in the United States during the Google News era. He says in 2005, the combined ad sales from news outlets was $50 billion, which has now fallen to $14 billion. For Smith, the buck stops squarely with Google:
“Where has all the money gone? Well, it’s very clear where it has gone — in Alphabet’s earnings yesterday they showed that in a single quarter, they had almost $45 billion in digital advertising,” he adds. “What Google has fundamentally done is redesigned and re-engineered the web so that if you want to make money from content based on advertising, you have to do it through their exchange, by using their tools and paying money to, and through Google.”
Google has often argued that it does filter money to news creators and has been since 2007. However, those ad revenues are for unregulated content creators on YouTube. These are exactly the outlets that some believe have propagated the trend of fake news, radicalization, and polarization.
Calls for Regulation
I’ll leave that up to you to decide, but Microsoft’s message is clear: Traditional news has been broken and Google is to blame. That’s why the company continues to call for government intervention. Smith wants to see strict regulations in place to force Google to increase how much it pays to newspapers.
Such a law is being passed in Australia. It is forcing online new curators to pay content creators for their work. For example, Facebook and Google must pay originators of sources for linking their work on their platforms.
Known as the News Media Bargaining Code, the law forces tech giants to reach deals with news outlets regarding remuneration when they link them in feeds and on their services. Google argues the code puts search habits at risk. Once the law was passed, Facebook immediately banned users in Australia from sharing, viewing, or using news articles.
Google eased its position and made the required deals with news outlets. At the time, Smith confirmed Microsoft agreed with the law and is actively pressing the U.S. government to adopt a similar framework.
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