Microsoft has backed Australia’s controversial News Media Bargaining Code, offering to fill the void left by Google if it follows through on its threat to leave the local market because of the Code.

Today, Microsoft offered to allow Australian small businesses to transfer their advertising to its search product, Bing, for free. It also announced that it would invest further in Bing to make it comparable to competitors.

While the proposed Code is currently only applied to Facebook and Google, the legislation allows for it to be applied to other platform companies. Microsoft says it would be willing to abide by the rules if the Code were expanded to include it.

Australia’s News Media Bargaining Code allows news publishers to negotiate collectively or individually with Google and Facebook for payment for sharing the publishers’ news content. With heavy fines for non-compliance and an arbitration model for when deals can not be struck, the Code is expected to create new revenue for the publishers at the expense of the tech giants.

Both Facebook and Google have railed against the Code, threatening to withhold news and search services respectively from the Australian market if the legislation goes ahead in its current form, despite significant concessions being made.

On Sunday, it emerged Microsoft CEO Satya Nadella had direct discussions with Australian Prime Minister Scott Morrison about filling the search market gap if Google does pull out.

On Wednesday, Microsoft’s second in command, company President Brad Smith issued a media statement backing the Code.

Smith, who also spoke with Morrison, said the Code “represents a fundamental step towards a more level playing field and a fairer digital ecosystem”. 

“The Code reasonably attempts to address the bargaining power imbalance between digital platforms and Australian news businesses. 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.”

Bing currently only has a small fraction of the search engine market dominated by Google. And while Microsoft’s online advertising revenues are growing, advertising is  far from its core business, unlike Google and Facebook.

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