Microsoft ‘fully supports’ government’s digital media code

US software giant Microsoft has publicly pledged to fill the void created by Google if it leaves the Australian market in a major boost for the Morrison government’s plans to introduce sweeping new rules to force tech giants to pay media companies.

Microsoft’s president Brad Smith said in a statement the company “fully supports” the government’s News Media Bargaining Code and will invest in its Bing search engine to allow small businesses wanting to transfer their advertising to the platform to do so simply and with no transfer costs.

Microsoft says it would invest in its Bing search engine to allow small businesses wanting to transfer their advertising to the platform to do so simply and with no transfer costs.Credit:James Alcock

“The code reasonably attempts to address the bargaining power imbalance between digital platforms and Australian news businesses.,” Microsoft President Brad Smith said.

“It also recognises the important role search plays, not only to consumers but to the thousands of Australian small businesses that rely on search and advertising technology to fund and support their organisations. While Microsoft is not subject to the legislation currently pending, we’d be willing to live by these rules if the government designates us.”

Prime Minister Scott Morrison said earlier this week that he was confident Microsoft would fill a gap in the market if Google followed through with threats to shut down search in response to newly proposed laws that will force it to pay for the existence of news content on its platform.

The proposed code will force the tech giants into binding commercial agreements to pay Australian news providers for the value that the content brings to their platforms. Failure to do so could cost them fines of up to 10 per cent of annual revenues.

Media companies such as Nine Entertainment Co, owner of this masthead, and News Corp are urging the government to pass the laws, arguing they are critical to ensuring the long-term future of local journalism. Both Google and Facebook have argued the code is unworkable and have separately threatened to alter their platforms for users if it goes ahead.

Google threatened to turn off its search engine in Australia if the proposed code becomes law at a Senate Committee Hearing two weeks ago, while Facebook has said it would be forced to remove news articles from its main app.

“We believe that the current legislative proposal represents a fundamental step towards a more level playing field and a fairer digital ecosystem for consumers, business, and society,” Mr Smith said.

“One thing is clear: 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.”

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