As Google Contemplates Australia Exit, Microsoft Moves to Cash in with Bing

As Google Contemplates Australia Exit, Microsoft Moves to Cash in with Bing

Google’s fallout with the Australian government is paving way for underdogs in the web search space to increase their market share. Microsoft is moving to take the place of Google, in case it withdraws its services in Australia.

Australia introduced legislation that would force Google and Facebook to pay publishers for their contents, and both US companies have threatened to withdraw their services in the country if the law comes into effect. On Monday, Australian Prime Minister Scott Morrison said Microsoft is confident its search product Bing, can fill the gap if Google pulls out.

The new legislation which requires both Google and Facebook to negotiate payments to local media outlets, whose content links they use to drive ad traffic, has created a faceoff between the tech companies and the Australian government.

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The new legislation means Facebook and Google will have to bargain with newsrooms either individually or collectively – and to enter arbitration if the parties can’t reach an agreement within three months, the Australian Competition and Consumer Commission which put out the legislation said.

Facebook and Google have responded by calling the law unworkable. They said it will have negative impact on how their services are rendered in Australia.

“If this version of the Code were to become law, it would give us no real choice but to stop making Google Search available in Australia,” Google Australian managing director Mel Silva told lawmakers. “That would be a bad outcome not just for us, but for the Australian people, media diversity and small businesses who use Google Search.”Google accounts for 94% of search services in the Australian market, and Silva said the new code, which “would require payments simply for links and snippets just to news results in search,” will undermine “the free service we offer Australian users, and our business model has been built on the ability to link freely between websites.”

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On the other hand, Facebook’s vice president of public policy for Asia, Simon Milner said the company could ultimately block news content in Australia, although the social media giant is now making a move for a talk with the Australian authorities.

Australian treasurer Josh Frydenberg said Facebook founder and CEO Mark Zuckerberg had requested a meeting over the law, and they had talked, but it doesn’t change anything.

Meghan Quinn, Australian Department of Treasury deputy secretary of markets said the government would have limited ability to intervene if Google’s departure hurt businesses which rely on its search function.

“The code doesn’t prevent the wholesale withdrawal of services, and there’s difficulty in any of the legislative mechanisms we’ve got for someone to (be forced to) provide a service,” she said.

Morris also said their (Facebook and Google) threat to withdraw services would not change the government’s stand on the matter. Now, the situation is opening a new door for Microsoft’s Bing, which has been the underdog in Australia.

Microsoft told Reuters that its CEO Satya Nadella has since spoken with Morrison about the new rules, and Morrison said on Monday the software company was ready to grow the presence of its search tool Bing.

“I can tell you, Microsoft’s pretty confident, when I spoke to Satya,” Morrison told reporters in Canberra.

“We just want the rules in the digital world to be the same that exist in the real world, in the physical world,” Morrison added.

A Microsoft spokeswoman confirmed the company has been in contact with the Australian government but didn’t give further details.

“We recognize the importance of a vibrant media sector and public interest journalism in a democracy and we recognize the challenges the media sector has faced over many years through changing business models and consumer preferences,” she said.

Getting publishers paid for their online contents has become a growing discussion between Google, Facebook and governments recently. Last week, France and Google reached an agreement with certified French media publishers’ body, APIG, to establish a framework for media content pay. The framework was developed under the European Union 2019 copyright law.

Microsoft’s move to fill the vacuum that possible Google exit will create in Australia may likely set a trajectory that will bridge the wide gap in the web search market. If more countries follow the step of Australia, it will create more opportunities for Bing and DuckDuckGo to win more market shares.

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