BMO Capital Markets Chief Investment Strategist Brian Belski talks about his prospects for major technology stocks.
Microsoft and Google are facing new bipartisan legislation that would help digital media companies and newspapers negotiate with major technology companies.
The Competition and Journalism Preservation Act, which was introduced in the House and Senate, would allow small news organizations to negotiate fees with the world’s major technology companies – such as Google and Facebook – that share their content for free.
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| GOOGL | ALPHABET, INC. | 2,050.00 | -50.54 | -2.41% |
| MSFT | MICROSOFT CORP. | 235.75 | -1.38 | -0.58% |
| FB | FACEBOOK, INC. | 268.40 | -5.48 | -2.00% |
Microsoft has expressed support for the legislation while Google is resisting its approval in both chambers, and the two companies issued statements on Friday attacking each other for their respective positions on the project.
Brad Smith, the president of Microsoft, took aim at what he described as Google’s dominance of the digital advertising market in his written testimony to Friday’s hearing on the competition before the Judicial Subcommittee of the Administrative, Commercial and Antitrust Law Chamber . He noted that Google captured “about a third of all digital advertising revenue in the United States last year”.
Microsoft’s Brad Smith (screenshot from YouTube / Commercial, Administrative and Competition Law Subcommittee)
Google “is the dominant technology company in virtually every corner of the digital advertising ecosystem,” said Smith, citing his arms from Search Ads, Ad Tech, Ad Exchange, Ad Tech Tools and Global Consumer Dataset as examples of the broad reach of the technology giant in the digital advertising market.
“News organizations have ad inventory to sell, but they can no longer sell directly to anyone who wants to place ads. Instead, for all practical purposes, they must use Google tools, operate on Google ad exchanges, contribute with data for Google operations and pay Google, “he said.
AUSTRALIA APPROVES LAW TO MAKE GOOGLE, FACEBOOK PAY FOR NEWS
Smith added that “Google has effectively become the ‘front page’ of news, retaining the relationship with the reader and relegating the news content of its properties to a commodity” and suggested that Congress “move forward with the Competition and Preservation Act Journalism and enable news organizations to negotiate collectively with online content distributors. “
Kent Walker, senior vice president of global affairs at Google, responded to Smith’s testimony in a statement on Friday listing the company’s efforts to support digital journalism, including a $ 1 billion investment to license news content by through its News Showcase feature over three years.
A Google application in Baltimore. (AP Photo / Patrick Semansky, Archive)
Walker then criticized the “vulnerabilities” in Microsoft’s systems after the software company announced in December that SolarWinds hackers had gained access to some of its source code used to build software products.
AUSTRALIA APPROVES LAW TO MAKE GOOGLE, FACEBOOK PAY FOR NEWS
“Microsoft is the second largest company in the United States by market capitalization and owns LinkedIn, MSN, Microsoft News and Bing, all places where news is regularly consumed and shared,” said Walker. “But their track record is patchy: they paid a much smaller amount to the news industry than we did. And given the chance to support or finance its own journalists, Microsoft replaced them with AI bots.”
He added that Google “will continue to collaborate with news organizations and lawmakers around the world to enable a solid future for journalism”.
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The dispute between the two companies and the court hearing in the Chamber of Deputies comes after Australia and France pressured major technology companies to consider paying for news they display on their respective websites to help finance the news industry.
Google announced deals in February to pay publishers in Australia after the country passed a law that would allow the country’s government to set prices for news agency deals if negotiations between technology companies and publishers fail.
The company had initially threatened to completely withdraw its search engine feature in Australia if the country passed the law.
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Hillary Vaughn of Fox Business contributed to this report.