Microsoft accuses Google of harming newspapers by monopolizing the online advertising market
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In an interview with Bloomberg Microsoft has continued to advocate for further regulatory action against Google, who they have accused of harming democracy by undermining the viability of traditional media.
“The reality is that Google has fundamentally sucked most of the oxygen out of the opportunities for people who create content to actually earn a living through advertising,” said Smith, who is also Microsoft’s chief legal officer, in a Bloomberg Television interview. “It’s interesting to just look at what has happened to what was supposed to be an open web — that was the promise of the internet.”
Smith noted that in 2005, U.S. news organizations generated almost $50 billion in ad sales, a figure that has plummeted to $14 billion.
“Where has all the money gone? Well, it’s very clear where it has gone — in Alphabet’s earnings yesterday they showed that in a single quarter, they had almost $45 billion in digital advertising,” he said. “What Google has fundamentally done is redesigned and re-engineered the web so that if you want to make money from content based on advertising, you have to do it through their exchange, by using their tools and paying money to, and through Google.”
Google claims that it has been sharing funds with media creators since 2007 via channels such as YouTube, but of course, it is exactly such unregulated media that has been accused of increasing polarization and radicalization around the world.
Microsoft backs legislation such as proposed in Australia which would increase the share of Google’s revenue paid out to newspapers online.
Google however said its advertising machinery is beneficial for news publishers and accused Microsoft of “reverting to their familiar playbook of attacking rivals and lobbying for regulations that benefit their own interests.”
Google, Apple and Facebook are currently being investigated by US Congress for abusing their dominant position, a scrutiny which Microsoft has encouraged and which it itself has avoided so far.
