Microsoft says it can replace Google, backs media code

US tech giant Microsoft has promised to fill the void if Google carries out its threat to ditch Australia and has announced it backs the government’s media bargaining code.

The development is welcome news for the federal government, which is embroiled in a stoush with Google and Facebook over its plan to make tech giants pay Australian news outlets for original content.

The two tech giants have declared the proposal unworkable and have threatened to punish Australians if it becomes law.

But in a statement on Wednesday, Microsoft president Brad Smith announced the company “fully supports” the code, saying it “represents a fundamental step towards a more level playing field”.

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“The code reasonably attempts to address the bargaining power imbalance between digital platforms and Australian news businesses,” he said.

“It also recognises the important role search plays, not only to consumers but to the thousands of Australian small businesses that rely on search and advertising technology to fund and support their organisations.

“While Microsoft is not subject to the legislation currently pending, we’d be willing to live by these rules if the government designates us.”

It comes after Google threatened to prevent Australians from using its Google Search function, which accounts for 95 per cent of searches in Australia.

Carrying out the threat would leave a $4bn void, which Microsoft is keen to fill. Picture: Justin Tallis / AFPSource:AFP

Google would walk away from the $4bn Australian market if carried out its threat, which prompted the Greens to call for a publicly owned search engine to replace it.

But Microsoft has moved swiftly to soften the blow.

It pledged a seamless transition to its own search engine, Bing, saying it would invest to make it “comparable” to its competitors.

“Microsoft will ensure that small businesses who wish to transfer their advertising to Bing can do so simply and with no transfer costs,” Mr Smith said.

“One thing is clear: while other tech companies may sometimes threaten to leave Australia, Microsoft will never make such a threat.

“We appreciate what Australia has long meant for Microsoft’s growth as a company, and we are committed to supporting the country’s national security and economic success.”

The laws would establish an independent umpire to determine how much tech giants would pay news outlets for their content, but the government has encouraged agreements outside of the code.

Google said the move would “break” its business model in Australia and has launched a massive PR blitz against the reforms.

Facebook CEO Mark Zuckerberg lobbied government ministers directly in a bid to reverse the proposal.

Treasurer Josh Frydenberg confirmed he had spoken to Mr Zuckerberg but said the government was firm on its plans.

Facebook also threatened to prevent Australians from posting or accessing news content on its platform.