Protectionism will eat itself

Google axes News in Spain in response to royalty law

Google has decided to shut down Google News in Spain. The decision follows the passage of a law in July that obliges any news aggregator quoting snippets of text or using thumbnails of images from a copyrighted publication to pay royalties for doing so.

In a blog post late Wednesday, [company]Google[/company] News chief Richard Gingras said the service makes no money because Google doesn’t advertise on it, so it would be unsustainable to continue operations in Spain. With the law set to come into effect in January, Google News will shut there on 16 December.

Spain is not the first European country to pass a so-called ancillary copyright law – Germany did so in March 2013 – but its version is much more heavy-handed.

In the German law, publishers can choose whether or not they want to grant a news aggregator such as Google News the right to use snippets of their copyrighted text in its search results without compensation. This is how the German publishers ultimately caved in: Google refused to pay royalties, so it stopped listing the articles of publishers who belonged to the relevant rights collection group. The publishers in that group ended up granting Google the right to use their text without having to pay up, but did so grumbling that the case demonstrated Google abusing its market power (never mind that other German aggregators had done precisely the same thing.)

Under the Spanish “Google tax” law, that simply wouldn’t be an option. There, the levy is an “inalienable right”, meaning publishers couldn’t give Google News a free pass even if they wanted to. As Weblogs CEO Julio Alonso recently wrote, that applies even to those who publish their content under a free-use copyleft license, such as Creative Commons.

Slippery slope

Google’s struggles with European publishers predate these ancillary copyright laws of the last couple years, and on two occasions it was able to stave off anything as drastic as legislative changes. In late 2012, the company struck a deal with Belgian publishers through which it appeared to buy millions of dollars’ worth of advertising in the relevant publications. And in early 2013 it established a fund for French publishers, to “support digital publishing initiatives.”

Now, following the German and Spanish examples, the idea of the “Google tax” may spread, as the European Commission’s recently-installed digital economy chief, Günther Oettinger, has been making noises about applying it across the EU. The German commissioner, who has the copyright reform file, recently said: “When Google takes intellectual works from within the EU and works with them, then the EU may protect those works and demand a levy from Google for them.”

The issue is also a major strand in the Google search antitrust case although, as I have previously argued, it is a copyright issue that bears little relation to the other elements of the case, and it should be considered separately. The other elements of the case are about harm to consumers and Google’s direct rivals, while this element is only about giving the publishers money for nothing.

The Spanish publishers will no doubt now see their traffic drop off a cliff, just as their German counterparts did, and this will almost certainly hammer their advertising revenues. But, because of the severity of the law they themselves forced, they will be able to do nothing about it. It’s not even a move that could see local rivals to Google flourish, as the law is not specific to the U.S. firm. I have asked AEDE, the relevant collection society, for comment.

In the overall theme of Europe pushing back against U.S. firms – a narrative that I find overplayed sometimes, as there isn’t nearly enough coordination in Europe to make this some kind of plot – Spain is fast emerging as the most heavy-handed player. The authorities there seem more overtly protectionist than elsewhere in Europe, and they’re not afraid to cause severe consequences for internet users and businesses.

When Spain banned Uber earlier this week, for example, the injunction also ordered Spanish ISPs and payment processors to block Uber’s customers from being able to use the service. And, as the EFF has pointed out, the same copyright law that introduced the “Google tax” will also introduce criminal liability for websites that refuse to remove links to copyright-infringing material.

5 Responses to “Google axes News in Spain in response to royalty law”

  1. Good riddance to a bunch of freeloading scum. How sad that they won’t share any of their riches with the people who do the work. They want all of their headlines and summaries for free. Then they want to pretend that they’re giving the newspapers a great gift if 1 or 2% of the headlines turn into clicks.

    They’re horrible, greedy people who are rich beyond belief. How sad that they won’t share with the journalists who do the work.

  2. Robert Welbourn

    The Spaniards clearly saw what happened in Germany, as publishers fell over themselves to grant Google permission, without payment, to excerpt headlines following the passage of Germany’s ancillary copyright law. Those that stood firm against freely granting Google permission saw their traffic plummet, to the benefit of those that did. The Spanish law is designed to stop individual publications from breaking ranks, under the theory that “If we don’t hang together, we shall surely be hanged separately.”

    The Spanish Minister of Culture, Jose Ignacio Wert, has accused Google of acting prematurely, “We haven’t even developed the regulations under the law yet!” he cried, sniffing that it was a business decision on Google’s part, and the Ministry wasn’t going to get involved. (Thanks, Google Translate!)

    So, if Google does abdicate from Spanish news permanently, what will likely happen is that large news organizations will get the bulk of the traffic at the expense of smaller outlets, and the diversity of news sources will fall. That will surely benefit larger publishers and certain politicians, but not the Spanish public.

    • Wrong. Google offers a free version that steals readers away from legit sites. Anyone can have a super cool bar if they steal the liquor. Anyone can have a super great store with low, low prices, if they steal the merchandise.

      People are curious about the world. They want the news. This will force them to go to sites that actually pay the workers. There are only so many readers. If they can’t have it for free from Google, they’ll be forced to search for legit sites.