Google Accuses Microsoft of “Breaking the Open Web”

Just before the weekend, Google published a caustic statement on Microsoft’s public support of Australia’s new law that forces Google and Facebook to pay publishers for their content. The law requires the companies to negotiate licensing agreements with publishers in order to include news articles in both search and news feeds, including snippets.

Last month, Microsoft published its endorsement of the Australian proposal and stated intentions for its Bing search engine to comply.

“In the hunt for better ideas, Google’s threat to boycott an entire country got our attention,” Microsoft President Brad Smith said.

“Satya Nadella and I reached out to Prime Minister Morrison. It was an opportunity to combine good business with a good cause and, as we explained, even if Google wanted to leave Australia, we would stay.”

After negotiations, Facebook decided to simply block Australian publishers from posting and block users from sharing any news originating from the country. In a full reversal, the company inked a three-year agreement with News Corp today, which covers The Australian national newspaper and several metropolitan papers.

Similarly, Google did not make good on its threat to remove its search engine from Australia, reluctantly making deals with Australian publishers and News Corp a few weeks ago. The company’s statement on Friday characterizes Microsoft’s position and its overt contrasting with Google, as “naked corporate opportunism” and an attack:

We also believe that this important debate should be about the substance of the issue, and not derailed by naked corporate opportunism … which brings us to Microsoft’s sudden interest in this discussion. We respect Microsoft’s success and we compete hard with them in cloud computing, search, productivity apps, video conferencing, email and many other areas. Unfortunately, as competition in these areas intensifies, they are reverting to their familiar playbook of attacking rivals and lobbying for regulations that benefit their own interests. They are now making self-serving claims and are even willing to break the way the open web works in an effort to undercut a rival. And their claims about our business and how we work with news publishers are just plain wrong.

The historic rivalry has been reignited, as Google fired back at Microsoft’s insinuation that the company doesn’t support journalism and is unwilling to collaborate with publishers.

“Proposals that would disrupt access to the open web (such as requiring payment for just showing links to websites) would hurt consumers, small businesses, and publishers,” Google’s SVP of Global Affairs Kent Walker said. “That’s why we’ve engaged constructively with publishers around the world on better solutions and will continue to do so.”

Microsoft supports Australia’s new law as a means to rectify “competitive imbalance between the tech sector and an independent press.” It also gives the company a high perch from which to call out Google and Facebook as “profitable tech gatekeepers on which businesses must advertise to reach consumers.” Microsoft believes its endorsement spurred Google to reverse its decision in order to remain in competition for the Australian search market.

“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 organizations,” Brad Smith said. “The key would be to create a more competitive market, something the government can facilitate. But, as we made clear, we are comfortable running a high-quality search service at lower economic margins than Google and with more economic returns for the press.”