Google's First Service Shut Down Because of Google Tax - The UpStream

Google's First Service Shut Down Because of Google Tax

posted Saturday Dec 13, 2014 by Scott Ertz

Google's First Service Shut Down Because of Google Tax

Between trying to break up the company, and punishing their profits, Google has had a rough time in Europe, but thus far they have managed to maintain all of their services. The consistent European onslaught of Google has officially claimed its first victim, however.

Spain has implemented a new law that requires that anyone who republishes news content, including the quick blurb in a search result, is required to pay for that right. Now, I will tell you that a lot of our readership is driven by news aggregators and search, including Bing and Google. The fact that a short bit of the article is provided in the result only encourages people to come to the site and read the rest. Spanish publications do not agree, and so explains the law.

As a result of the new law, Google will shut down its Google News service in Spain. Google said in a blog post responding to the law and explaining their position,

Sadly, as a result of a new Spanish law, we'll shortly have to close Google News in Spain. Let me explain why. This new legislation requires every Spanish publication to charge services like Google News for showing even the smallest snippet from their publications, whether they want to or not. As Google News itself makes no money (we do not show any advertising on the site) this new approach is simply not sustainable. So it's with real sadness that on 16 December (before the new law comes into effect in January) we'll remove Spanish publishers from Google News, and close Google News in Spain.

Spain's law is not the first of its type, though it is the first of its depth. In Germany, publishers are entitled to up to 11 percent of revenue generated from Google News, which as you just read does not generate any revenue. Even if publishers could prove revenue, they are required to collect on it themselves without any interaction from the government. That is not the case for Spain. In the event the law is violated, including the republisher failing to pay the required licensing fees, a penalty of more than $750,000 can be levied from the government.

It will be interesting to see how widely this law is applied and enforced. Facebook provides services similar to that of Google News. For example, on the right side of your feed is a trending section. When clicking a topic, you get a snippet of the article in question. In fact, as you scroll down, you can get a snippet from many articles relating to the topic. This would technically violate the new Spanish law, but my expectation is it will not be prosecuted.

The law was intended specifically to punish Google for not making any money by driving readers to publishers who do make money from said readers. While that makes absolutely no sense, that has not yet been a requirement for passing Google-related laws in Europe. Because of that, I suspect that Facebook will be safe, at least until they become the next target of the European Union.

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