Technology companies under pressure

Technology companies under pressure

26 February 2021

The economic dominance of some companies has long been a problem for several countries. Above all the current focus lies on the technology giants of Facebook, Google and Microsoft who have a dominant role in their field. The Australian government recently published a draft law, which would oblige these firms to pay press publishers for the publication of their content.

Australia as a pioneer?

In the course of the past week the Australian Government has put forward a bill that was passed by the lower house of parliament. This bill challenges the dominance of Facebook and Alphabet subsidiary Google in the news market industry by requiring media companies to pay publishers of journalistic articles for their content. The Senate was expected to pass this bill by the end of the week. The reaction from Facebook came only a little while later by blocking all news content in Australia. Thus, Australian users of the social media platform could neither access content nor share previously viewed reports.  Google reacted differently the change in media laws. Until now the company has avoided a direct confrontation with the Australian government. This matter is being closely watched internationally, with other countries such as Canada and the UK considering similar legislation. After many negotiations between the Australian government and the Facebook CEO Mark Zuckerberg, the two parties agreed on a compromise. The company will lift the block on journalistic content in Australia. In return, some adjustments will be made to the Australian government’s draft legislation. The amendments aim to give a more precise application framework and provide clearer guidelines for fair remuneration of business in the news media sector.

Facebook shows its power

Facebook has demonstrated its power following the impending restriction by the Australian government’s bill. The US company’s move to temporarily block the use of journalistic content in Australia has drawn criticism from many other countries. According to the Australian Prime Minister Scott Morrison, such actions only confirm the concerns that more and more countries have about the behaviour Big Tech companies. According to Morrison, they do not abide by existing rules and believe they are bigger than governments. Microsoft President also reacted to Facebook’s behaviour calling it a big mistake.

Google accepts the new measures

Unlike Facebook, Google has decided to accept the new law. Even before the new bill was passed by the Senate, Google reached an agreement regarding payments for journalistic content with Australia’s biggest media group, Sven West Media. According to the Australian media house Nine West Entertainment, both parties agreed to a yearly payment of around 30 million AUSD, or about 19 million EUR. In comparison, Google’s parent company Alphabet generated revenues of around 57 billion USD in the last quarter of 2020 alone. This not only represents an increase of around 23 per cent compared to the fourth quarter in the previous year, but is also a new quarterly record for the company.

Microsoft forms an alliance against Facebook und Google

Whilst Facebook and Google are directly affected by the new law, the American software producer Microsoft has decided, together with several European publishers’ associations, to develop a new system to regulate the payment of their content on the internet. In the past years, Microsoft has kept itself out of the discussions and disputes between the technology companies. Now the software producer positions itself with its alliance against both the giants Facebook and Google. In addition to Microsoft, the four European associations EPC, NME, EMMA und ENPA are also initiators. The latter also includes the Federal Association of Digital Publishers, as well as the newspaper publishers BDZV. The aim of this alliance, apart from the system for paying content on the net, is a similar adaption of the law as that of the Australian government for Europe.

Stock overview

Facebook's stock is currently being traded at USD 263.47 (23.02.2021). The stock reached its yearly high of USD 303.91 (26.08.2020) and yearly low of USD 146.01 (16.03.2020). 49 Bloomberg analysts place the stock on BUY, 5 on HOLD and 3 analysts put it on SELL.

Alphabet's stock is currently being traded at USD 2031, 79 (23.02.2021). The stock reached its yearly high of USD 2118.62 (17.02.2021) and yearly low of USD 1054, 13 (23.03.2020). 40 Bloomberg analysts place the stock on BUY, 2 on HOLD and 0 analysts put it on SELL.

Microsoft Corporation's stock is currently being traded at USD 232.09 (23.02.2021). The stock reached its yearly high of USD 244, 99 (12.02.2021) and yearly low of USD 135.42 (16.03.2020). 36 Bloomberg analysts place the stock on BUY, 4 on HOLD and 0 analysts put it on SELL.

Important legal information

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30/11/2022 07:33:57


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