Google News shutdown in Spain: Does anyone win?

As of January, Spanish law would have required Google to pay for content from Spanish news organizations.

Google is shutting down its Google News service in Spain next week in response to new legislation that requires the search giant to pay for content from Spanish news organizations. 

Richard Gingras, the head of Google News, announced the decision on Google’s Europe blog Thursday. “With real sadness,” he wrote, Spanish publishers will be removed from the site on Dec. 16.

The change to Spain's copyright law, which goes into effect in January, allows Spanish newspapers and other publishers to charge Google each time their content appears on Google News. The so-called “Google tax” applies to all news aggregation sites, including Menéame, Google’s Spain-based rival. 

“As Google News itself makes no money (we do not show any advertising on the site) this new approach is simply not sustainable,” Mr. Gingras explained.  

The new law does not specify how much the company would have to pay publishers.

Google’s decision in Spain follows a decade-long standoff with news publishers across the world, who often blame the company for drops in revenue and readership. Google contends that it directs millions of Internet users to their sites, allowing them to make money through online advertising.

Alejandro Tourino, a Madrid-based lawyer who specializes in media issues, told The Associated Press that it is not clear what impact this will have on Spanish news publishers. "Time will tell," he said.

The new Spanish law follows similar legislation passed in other European countries. In 2013, Germany revised its copyright laws to allow publishers to charge Google when parts of their articles appeared on its news aggregation site. Google responded by asking publishers for permission to include snippets of their content for free.

Many German publishers have since given in to the request, having found Google’s ability to drive traffic difficult to replicate without a presence on Google News. As The New York Times reports:

Axel Springer, one of Germany’s largest publishers, which has talked openly about Google’s dominance, experienced a 40 percent fall in traffic directed from Google’s search results and an 80 percent drop in traffic from Google News, according to Mathias Döpfner, Axel Springer’s chief executive.

Mr. Döpfner said that Axel Springer would have “shot ourselves out of the market” if the company had continued demanding that news aggregating sites pay a licensing fee for its content. 

Axel Springer reversed its policy in November. But unlike Germany, where publishers can decide whether to charge Google and other news aggregation providers, the new Spanish law does not allow local publishers to decline such payments.

“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,” Gingras said.

SimilarWeb, an online traffic measurement firm, found that referrals from sites such as Google News are responsible for less than a quarter of traffic to the top five Spanish news sites, according to Reuters.  With roughly 3.5 million monthly visitors, Google News is the 226th most visited site in Spain.

The dispute between Google and European publishers extends beyond Spain and Germany. In 2013, French news organizations dropped their demands that Google pay them for every click on online versions of their stories, The Wall Street Journal reported. In return, the company donated $82 million to help them increase online advertising revenue and fund digital publishing innovations.