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Google News will shut down in Spain in response to 'Google Tax' (+video)

Google News will close in Spain ahead of a new law which would require Google to pay publishers for showing snippets of their content on its site. Google will also remove Spanish publishers from international editions of Google News.

Google announced this week that it will shut down Google News for users in Spain in response to a new intellectual property law which will take effect in the country starting next year. The law, dubbed the “Google Tax,” would require Google and other news aggregators to pay publishers to show their content on their sites. Since Google doesn’t make any money from the News service, the company decided a pay-for-publication approach isn’t sustainable. Google will close Google News in Spain next week and will remove Spanish publishers from Google News sites in other countries.

Spain’s “Google Tax” law is an effort to protect the country’s local media industry by giving publishers more bargaining power against online news aggregators such as Google. The law doesn’t specify how much Google would have to pay publishers, but it sets a penalty of 600,000 Euros ($748,000) for failure to comply. That’s a hefty potential fee for Google, which aggregates millions of news links but doesn’t make any advertising revenue off its News Service.

Google News chief Richard Gingras said in a company blog post on Thursday, “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 ...  this new approach is simply not sustainable.” Google News will shut down in Spain on December 16, ahead of when the new law takes effect in January.

There has always been tension between Google and European media services, who argue that Google is building its own media empire by using their copyrighted content for free. But Google says its News service provides value by driving billions of people to those sites, increasing advertising revenue for publications large and small. Last year, Google removed several German publishers from Google News in response to a German law that allowed (but did not require) newspapers to demand payment from Google. The publishers soon asked Google to be relisted, saying their exclusion from Google News had caused visitor traffic and ad revenues to plummet.

Spain’s exclusion from Google News means Spanish readers will have to work a bit harder to find information and updates, and international readers will have less-easy access to news from and about the country. That could be significant, since Spain will have triple elections -- local, regional, and national -- in 2015. Spanish news organizations won’t be able to reach Latin American readers through Google News, and reports in English from outlets such as El Pais, Spain’s leading daily newspaper, won’t reach international readers.

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