Google and Microsoft are duking it out over the future of the news industry, at a time when both companies are under scrutiny.
Google and Facebook are vehemently opposed to a new bill that would level the playing field between news publishers and the search engines and social media platforms they rely on. Both companies initially opposed similar legislation in Australia, before finally acquiescing.
Unlike Google and Facebook, Microsoft has supported Australia’s regulators, and thrown its weight behind the efforts in the US. In written testimony for the congressional hearing, Microsoft President Brad Smith laid out the company’s stand:
Third, we need the government to act. This in part is because of the indispensable role the free press plays in our democracy and because progress in resuscitating news and journalism back to health is, at best, spotty. It is also because 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. As a result, there is a persistent and structural imbalance between a technology gatekeeper and the free press, particularly small and independent news organizations. This makes it very unlikely that the economic transformation needed to restore journalism to health can succeed at scale without new legislation and government support.
As noted above, this is not to make a statement about whether Google has acted unlawfully. We respect the company’s sustained creativity, investments, and determination. But as we learned first-hand from Microsoft’s own experience two decades ago, when a company’s success creates side effects that adversely impact a market and our society, the problem should not be ignored. And this typically requires government action.
Google didn’t take the criticism lying down, issuing its own statement that took a shot at Microsoft:
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.
This latest attack marks a return to Microsoft’s longtime practices. And it’s no coincidence 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 U.S., 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. Microsoft was warned about the vulnerabilities in their system, knew they were being exploited, and are now doing damage control while their customers scramble to pick up the pieces from what has been dubbed the Great Email Robbery. So maybe it’s not surprising to see them dusting off the old diversionary Scroogled playbook.
Needless to say, the two companies aren’t mincing any words, although Google’s words were far more pointed, accusing Microsoft of a self-serving attempt to take scrutiny off of its recent security issues.
The coming weeks are sure to be interesting as the two companies continue to square off.