Microsoft teams up with European news publishers to make Google and…

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.

Microsoft has plainly been delighted with Google’s and Facebook’s misfortunes in Australia, where legislators are about to force them to pay news publishers for reproducing snippets of articles in their search results and news feeds. And now it’s trying to make its Big Tech rivals squirm in Europe, too.

On Monday, Microsoft and Europe’s four biggest news-publisher associations issued a joint call for the EU to adopt similar reforms to those being passed in Australia.

They said “gatekeepers that have dominant market power”—meaning Google for search, and Facebook for social networking—should be forced to pay publishers for using their content, with the price being decided by an arbitration panel.

In Australia, the impending law has caused a huge commotion—especially after Facebook blocked Australian users from sharing news at all, in a ham-fisted move that also took out large amounts of non-news content relating to COVID-19 vaccinations, the weather, and other matters.

Google, by contrast, signed a multiyear “partnership” with News Corp, the press publisher that dominates Australia’s media landscape. But before Google made that concession, it threatened to pull its search services from Australia—a move that gave Microsoft a window of opportunity to promote its Bing search engine in the country, as an enthusiastically compliant alternative to Google Search.

However, the idea of making Big Tech platforms pay publishers for “using” their content—which generally means showing readers fragments of that content so they then click through to the actual article—is European in origin, not Australian. And to understand what Microsoft and the publishers’ associations are calling for now, it’s worth quickly looking back at the idea’s history.

The evolution of ancillary copyright

In 2013, under pressure from the powerful Axel Springer publishing house, the German government introduced an “ancillary copyright” law demanding Google and others pay publishers for reproducing snippets of their articles. In response, Google stopped reproducing snippets from the complaining publishers, with the result that traffic to those publishers’ websites collapsed. The publishers relented, giving Google a temporary get-out from having to pay.

Two years later, Spain tried a tighter variation on the same idea; this time, publishers had no choice about whether or not to charge Google for reproducing their snippets. Google responded by shutting down Google News in Spain, in a move that particularly harmed small publishers who relied on search to expose their articles to new readers.

In 2019, the EU passed a major copyright reform that introduced ancillary copyright across the bloc—though because it did so in a directive rather than a regulation, each EU country gets to put its own spin on the reforms as it transposes them into national law, and this process will only be complete in June of this year.

This was a major victory for the media, as having EU-wide rules made it harder for the tech titans to push back. However, despite the fact that the law they lobbied for is still in the process of being implemented, the publishers want more.

Specifically, the publishers hope lawmakers will augment the brand-new copyright directive with new measures, to be included in separate EU legislation that is currently in its early stages—laws that are also intended to crack down on Big Tech, though on the antitrust and hate-speech fronts rather than on copyright (again).

Arbitration call

What Australia is introducing, and what the EU copyright directive lacks, is the arbitration mechanism for settling disputes over how much the tech firms should pay the publishers. According to Monday’s statement by Microsoft and the European publishers, this mechanism is needed to “create legal certainty.”

“Otherwise, even though press publishers have [ancillary copyright], they might not have the economic strength to negotiate fair and balanced agreements with these gatekeeper tech companies, who might otherwise threaten to walk away from negotiations or exit markets entirely,” the statement read.

Much as Google signed a deal with News Corp this month, in January it agreed to pay French publishers for reusing their content. Google originally tried to get out of this by no longer publishing the offending snippets—an echo of the strategy that once worked well for it in Germany—but the French antitrust watchdog forced it to go back to the negotiating table.

“The experiences in France and Australia have shown us that there’s a real need for a binding instrument to address inherent imbalances in bargaining power with gatekeepers, which undermine the potential of Europe’s press sector,” said Fernando de Yarza, the president of News Media Europe, in Monday’s statement. “We look forward to working with Microsoft and others on a solution that allows for a healthy and diverse online news media ecosystem.”

The joint statement leaned heavily on the media’s importance for democracy. “Access to fresh, broad, and deep press coverage is critical to the success of our democracies,” said Microsoft VP Casper Klynge.

“A fully functioning and competitive ecosystem will strengthen media pluralism and will ultimately strengthen democratic discourse. Democracy relies on a free press to make it through difficult times. Any legislative proposal that strengthens democracy and supports a free press should be promoted by the technology industry, which is a product of the very same freedoms and values,” said European Newspaper Publishers’ Association president Jean-Pierre de Kerraoul.

Asked to respond to Microsoft’s joint missive with the EU’s big publishing associations, a Google spokesperson said: “We already have hundreds of partnerships with news publishers large and small across Europe, making us one of the biggest funders of journalism.”

Facebook declined to comment.