Google Inc (GOOGL) Shutting Spanish News Site Over “Google Tax”

Google Inc (NASDAQ:GOOGL) will be shutting down its Google News service in Spain starting December 16, ahead of a “Google Tax” law that is to take effect in the country starting January 1 next year. A blog post by Richard Gingras, head of Google News, explains that the new Spanish law will require news aggregation service such as Google News to pay Spanish publications for showing even the smallest snippets of news from such publications, regardless of whether they want to charge a fee or not.

Google Inc (NASDAQ:GOOGL)’s response to the new law means that Spanish-speaking readers  around the world  will no longer find any links to Spanish news appearing in the search giant’s search results page, and Google says that it is with sadness it has to remove Spanish publishers from Google News, in effect closing down Google News in Spain.

Google (GOOG)The new law, which was passed by Spanish legislature in October and is now dubbed as “Google Tax”, imposes a fine of $750,000 (€600,000) to news aggregators who fail to pay a fee to the Association of Editors of Spanish Dailies for posting links and excerpts of articles appearing in the publications of the association’s member publishers. The Association of Editors of Spanish Dailies covers the whole Spanish newspaper industry. According to Google, it will not be sustainable to pay such a fee because it does not display ads alongside snippets and links in Google News.

Google Inc (NASDAQ:GOOGL)’s has long been under the microscope of European regulators, and the search giant had to contend with the “right to be forgotten rule” issued by an EU court, requiring it and other search engines to delete links which users might find offensive or inaccurate. More recently, Google has also been under attack with an EU draft resolution that sought to “unbundle search engines from other commercial services”.

Prior to the current Spanish law requiring Google to pay a fee for linking to Spanish news publishers, Germany have also amended its copyright laws in 2013, which would have required Google Inc (NASDAQ:GOOGL) to  make payments to German news publishers for posting links and news snippets. Google responded by asking German publishers to explicitly free Google from such payments. An experiment by the publishers, however, proved that Google sent significant traffic to their websites, and Germany’s largest publisher, Axel Springer, abandoned its plans of blocking Google from showing snippets of articles from its sites.

This article has been written by Nonito Guntan.

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