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The Technology 202: Microsoft takes aim at Google and Facebook with call for new U.S. media rules

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with Aaron Schaffer

Microsoft is targeting Facebook and Google in its latest policy push.

Brad Smith, the company’s president, yesterday called for the United States and other countries to adopt legislation similar to a proposal in Australia that would force tech companies to pay publishers for news. It's an escalation of Microsoft’s previous statements of support of the media rules — which Google and Facebook have been fighting.

“The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press,” Smith wrote in a blog post. “It should copy it instead.”

Microsoft sees a business opportunity for its own Bing search engine to grow and has committed to stay in Australia if the rules take effect. But its stand could have ripple effects across the world in Washington, where U.S. lawmakers are closely studying the impact of tech giants on media businesses.

Microsoft's push could catch on with members of Congress increasingly looking to rein in tech companies' size. A 16-month-long congressional investigation into tech companies’ power that concluded last year began with a hearing where media publishers testified about how large tech companies pose a “potentially existential threat” to their business. A bipartisan pair of lawmakers also introduced legislation in 2018 to exempt media companies from antitrust laws so that they have more power to negotiate with tech companies over content licensing or revenue sharing deals.

Microsoft is in a unique position as lawmakers promise a reckoning for Big Tech. 

The company was the poster child for antitrust issues in the industry in the late 1990s and early 2000s as the Justice Department and state attorneys general brought lawsuits against it. These days, Microsoft is largely above the regulatory fray, even though it's valued as of this morning more than Amazon, Google or Facebook.  (Amazon founder Jeff Bezos owns The Washington Post.)

Microsoft has adopted a more collaborative approach with Washington lawmakers since its previous tangles, and its business now is more focused on selling to other businesses. Microsoft is also largely not as exposed to many of the content moderation controversies that are embroiling other tech giants because its business is not as dependent on social media — although it does own the platform LinkedIn.

That has allowed Microsoft to advocate for policies that might curtail the other tech giants’ business practices. Earlier this week, Microsoft CEO Satya Nadella called for greater regulation of social media companies.

“Unilateral action by individual companies in democracies like ours is just not long-term stable — we do need to be able to have a framework of laws and norms,” Nadella said in an interview with Bloomberg Television’s Emily Chang. “Depending on any one individual CEO in any one of these companies to make calls that are going to really help us maintain something as sacred and as important as our democracy in the long run is just no way that at least I, as a citizen, would advocate for.”

Microsoft argues that the Australia rules could usher in greater competition in the industry. 

Smith argues that the Australian rules are a creative proposal to address growing concerns about the negative effects tech platforms are having on political discourse. 

Google has threatened to pull its search engine out of Australia if the new rules take effect, and Facebook said it would make major changes to its products so that people cannot share links to news articles. 

Yet Microsoft's latest blog post could undermine those threats from companies, because the tech giant sought to highlight that it was willing to run its business there with lower economic margins than Google if that meant greater benefit for the press. Smith said he and Nadella have expressed this position to Australia's prime minister. 

Microsoft estimates Bing has less than 5 percent of market share in Australia.

“With a realistic prospect of gaining usage share, we are confident we can build the service Australians want and need,” Smith wrote. “And, unlike Google, if we can grow, we are prepared to sign up for the new law’s obligations, including sharing revenue as proposed with news organizations.”

Our top tabs

Maryland is set to adopt a first-in-the-nation tax on online ads. 

Democrats in the state’s legislature are set to adopt the measure as soon as today, Tony Romm reports. The legislation comes as more states look at taxing tech giants to capture some of their record profits amid the coronavirus pandemic.

“Right now, they don’t contribute,” said state Sen. Bill Ferguson, the chief sponsor of Maryland’s tax proposal. “These platforms that have grown fast, and so enormously, should also have to contribute to the civic infrastructure that helped them become so successful.” The bill’s backers say that it could raise as much as $250 million to fund state education changes.

Tech giants including Amazon, Facebook and Google have lobbied against the proposal. They are expected to support a lawsuit to stop the tax from taking effect on the grounds that it's unconstitutional, and argue it runs afoul of a federal moratorium on taxes that exclusively target Internet companies.

The Biden administration asks a court to pause proceedings on the WeChat ban.

The administration wants the federal appeals court to pause proceedings on the ban of the popular messaging app as it reviews the Trump administration’s executive actions targeting the app and TikTok, Jeanne Whalen reports. The Biden administration used similar language in a Wednesday request for a delay in proceedings involving then-President Donald Trump’s proposed ban on TikTok.

The Justice Department said in its filing that the administration plans to review the justification, noting that it will “be better positioned to determine whether the national security threat described in the President’s August 6, 2020 Executive Order, and the regulatory purpose of protecting the security of Americans and their data, continue to warrant the identified Prohibitions.”

Republican lawmakers have expressed concerns about the Biden administration’s China policies, with Sen. Ted Cruz (R-Tex.) putting a hold on President Biden’s pick to lead the Commerce Department, Rhode Island Gov. Gina Raimondo, until the administration “commits to keep the massive Chinese Communist Party spy operation Huawei on the Entity List.” 

Clearview AI says its facial recognition technology could be used in dating.

The company wrote in a newly unveiled patent filing that its massive database of faces could be used for applications beyond law enforcement, including in dating, real estate and retail industries, BuzzFeed News’s Caroline Haskins, Ryan Mac and Brianna Sacks report. It comes as regulators worldwide scrutinize the company, which has a database of more than 3 billion images from the Internet.

“We applied for a patent because we believe we have made significant innovations in the field of facial recognition, especially regarding accuracy and the use of our large-scale database of publicly available facial images,” Clearview AI CEO Hoan Ton-That said. “Clearview AI is currently only used by law enforcement for after-the-crime investigations.”

Rant and rave

Instagram took down an account belonging to Robert Kennedy Jr., a prominent anti-vaccine influencer. Max Burns, the communications director of New York Assemblywoman Yuh-Line Niou:

Sen. Brian Schatz (D-Hawaii) praised the move and called for Twitter to follow:

Conservative social media network Gab, however, says Kennedy is welcome on its platform:

Inside the industry

Facebook's board receives an avalanche of comments as it prepares to decide the fate of Trump's account.

A representative of the Oversight Board said that it has received more than 9,000 comments as it prepares to decide whether to reinstate Trump on Facebook and Instagram, Politico’s Christiano Lima reports. The ban and similar actions by other social networks have sparked debates about how the tech giants should be moderating the ex-president’s speech.

Activist groups such as the Real Facebook Oversight Board say that Trump should be permanently banned from the site, while the Knight First Amendment Institute said the board “shouldn't immediately address the question of Trump’s suspension.” Both raised questions about the board’s mandate.

GameStop mania is focus of federal probes into possible manipulation (Wall Street Journal)

Biden team pledges aggressive steps to address chip shortage (Bloomberg)

Trending

Twitter suspends Project Veritas account (Politico)

Mentions

  • Former House Science Committee Chairman Lamar Smith (R-Texas) has registered to lobby on quantum computing issues for IBM, while former Rep. Jim Moran (D-Va.) has registered to lobby for Salesforce on government IT issues. 
  • Kevin Kayes, a former aide to ex-Senate majority leader Harry M. Reid (D-Nev.), has registered as a lobbyist for NCTA (The Internet & Television Association). He expects to lobby on telecommunications and broadband policy.

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