Microsoft takes jabs at Google over power imbalance between publishers and Big Tech

Lawmakers on Friday debated an antitrust bill that would give news publishers collective bargaining power with online platforms like Facebook and Google, putting the spotlight on a proposal aimed at chipping away at the power of Big Tech.

At a hearing held by the House antitrust subcommittee, Microsoft’s president, Brad Smith, emerged as a leading industry voice in favor of the law. He took a divergent path from his tech counterparts, pointing to an imbalance in power between publishers and tech platforms. Newspaper ad revenue plummeted to $14.3 billion in 2018 from $49.4 billion in 2005, he said, while ad revenue at Google jumped to $116 billion from $6.1 billion.

“Even though news helps fuel search engines, news organisations frequently are uncompensated or, at best, undercompensated for its use,” Smith said. “The problems that beset journalism today are caused in part by a fundamental lack of competition in the search and ad tech markets that are controlled by Google.”

The hearing was the second in a series planned by the subcommittee to set the stage for the creation of stronger antitrust laws. In October, the subcommittee, led by Rep. David Cicilline, D-R.I., released the results of a 16-month investigation into the power of Amazon, Apple, Facebook and Google. The report accused the companies of monopoly behaviour.

This week, the committee’s two top leaders, Cicilline and Rep. Ken Buck, R-Colo., introduced the Journalism and Competition Preservation Act. The bill aims to give smaller news publishers the ability to band together to bargain with online platforms for higher fees for distributing their content. The bill was also introduced in the Senate by Sen. Amy Klobuchar, D-Minn., the chairwoman of that chamber’s antitrust subcommittee.

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Global concern is growing over the decline of local news organisations, which have become dependent on online platforms for distribution of their content. Australia recently proposed a law allowing news publishers to bargain with Google and Facebook, and lawmakers in Canada and Britain are considering similar steps.

Cicilline said, “While I do not view this legislation as a substitute for more meaningful competition online — including structural remedies to address the underlying problems in the market — it is clear that we must do something in the short term to save trustworthy journalism before it is lost forever.”

Google, although not a witness at the hearing, issued a statement in response to Smith’s planned testimony, defending its business practices and disparaging the motives of Microsoft, whose Bing search engine runs a very distant second place behind Google.

“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,” wrote Kent Walker, the senior vice president of policy for Google.