Video Google and Microsoft were locked in a rare public war of words on Friday as the US House subcommittee on antitrust held a hearing to discuss how Big Tech has impacted the media.
As lawmakers in Australia and Europe consider passing legislation to force Google and Facebook to pay publishers for using news content, Microsoft has been more than happy to fan the flames.
Microsoft CEO Satya Nadella cosied up to Oz Prime Minister Scott Morrison to promote the Windows giant's Bing after the Chocolate Factory threatened to shut down Google Search Down Under if it was forced to pay news outlets. Redmond also ganged up with four European media trade groups to lobby the European Commission to consider similar policies.
Now the fight is coming to America. Congress is mulling a bipartisan bill that would allow news orgs to band together and get Google and Facebook to negotiate over the use of news content. David Cicilline (D-RI), one of the House representatives, behind the Journalism Competition and Preservation Act (JCPA), invited Microsoft’s President Brad Smith to the hearing at the end of this week.
You can watch the whole hearing below if you've got three hours to spare.
Smith made an impassioned opening statement, mourning the dying light of journalism and its importance to democracy. We'll remember that the next time Microsoft decides to carefully coordinate its product launches with a few selected tame publications, and stonewalls journalists who ask tough questions. Crap, did we say that out loud?
Anyway, the killer responsible for choking the life out of news publishers as they fight for audience and income from advertising is, obviously, Google, Smith claimed. Not only does the Chocolate Factory harvest and reuse their content, it bites off a massive chunk of their advertising revenues, and drives down ad rates to pennies.
“The accelerating crisis in news and journalism reflects the shift away from traditional advertising – ie, television, radio, and print – to digital advertising, enabled by the emergence of the internet and fueled by behavioral data-based targeting,” Smith said.
Google has been the biggest winner, capturing about a third of all digital advertising revenue in the US in the last year
“Google has been the biggest winner, capturing about a third of all digital advertising revenue in the US in the last year. Indeed, since its founding just over twenty years ago, Google has grown its global ad revenue to approximately $147bn,” added the executive who works at a company that recorded $143bn in revenue in 2020. Although to be fair, that's across all of Microsoft's portfolio, from Azure to Xbox, rather than one sector, like ads.
Smith explained how Google controls the whole digital ads business on the world’s most popular search engine. Publishers selling adverts on their websites pay a cut to Google to host them, and advertisers looking to buy space also pay Google to target specific audiences on the worldwide web.
“Google’s digital advertising business encompasses the entire internet. It enables Google to aggregate the content of others, attract users, harvest their data, and then directly target them with ads at an unprecedented scale,” he continued.
Microsoft believes the best way to curtail Google is to support bills like the JCPA and to introduce new regulations to clamp down on its search and digital advertising power.
Google, meanwhile, has had enough of Microsoft's trash talk. In an attempt to defend his biz, Google senior veep of global affairs Kent Walker accused Redmond of trying to stir up trouble to distract policymakers and the public from the critical vulnerabilities in Microsoft Exchange being exploited around the world right now to compromise thousands of organizations, and that some of its source code was stolen by miscreants during the SolarWinds backdoor fiasco.
Lobbying? That's our job! That's our job!
“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,” Walker said in a blog post coinciding with the hearings.
“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.”
A big tech company lobbying for regulations that benefit its own interests? Where have we heard that before, Google?
- Biggest Washington DC lobbyist is now a tech giant (yes, it's Google)
- Google: Hmm, this government regulation stuff looks important. Let's stick some more lobbyists on that
- Google, Amazon, Apple, Facebook blow massive amounts lobbying Trump administration
- Q. How much did Google just spend applying political pressure in the US? A. $4.6 million
- Google spent record cash lobbying Congress in 2014 – report
- Google officially doubles EU lobbying – but true figure is surely higher
- Google lobbies hard to derail new US privacy laws – using dodgy stats
That aside, Walker pressed on with his angle that Microsoft wanted to deflect from the fall out of the SolarWinds cyber-espionage campaign, and the buggy Exchange code that was wildly exploited this month and earlier. Far be it from us to defend Redmond, Google's software isn't exactly known to be flaw free, either.
Still, if Microsoft wants to bash Google's internet monopoly, who are we to stop the Android goliath from fighting back – though rather than lead with the SolarWinds affair, Google may want to start with the continuing dominance of Windows on the desktop, for instance. But then, Microsoft could counter with Android on mobile. All right, they're just as bad as each other.
“It’s no coincidence," said Walker, "that Microsoft’s newfound interest in attacking us comes on the heels of the SolarWinds attack and at a moment when they’ve allowed tens of thousands of their customers — including government agencies in the US, NATO allies, banks, nonprofits, telecommunications providers, public utilities, police, fire and rescue units, hospitals and, presumably, news organizations — to be actively hacked via major Microsoft vulnerabilities."
Google also mentioned that it collectively pays news publishers more than Microsoft has through contract agreements in its Google News Initiative, and kicked Microsoft for having replaced its Microsoft News and MSN journalists with bots.
The Register has asked Google and Microsoft for further comment because we love a good public squabble in the IT world.
Meanwhile as both mega-corps continue their slagging match, Cicilline faces an uphill battle to pass the JCPA. The first two times he proposed the bill, it was swiftly binned by Congress. But as the idea to get tech companies to pay for working with news content online picks up momentum around the world, it does seem like the walls could be closing in on Google and Facebook. ®
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