Google News to Leave Spain

Google

Spain will change its Intellectual Property Law next year to force Internet companies to pay publishers for aggregating their articles online

Google News is leaving Spain as of Dec. 16 in response to changes to the country's Intellectual Property law due to take effect in the New Year.

In a blog post, Google News’ Richard Gingras announced that Google News would shut down its Spainish operation rather than pay Spanish newspaper and magazine publishers to aggregate their articles, as is required under the new law. Google News displays headlines and summaries of news articles, linking to the original work online.

In the blog, Gingras said that Google News makes no money off its service, as no ads are shown on the news pages and that the model proposed by the law was too costly and “unsustainable.”

The law, which is to take effect Jan. 1, does not specify how much publishers should be paid, but allows for a sanction up to $750,000 for not complying with the law.

“For centuries, publishers have seen the limited reach of their circulation in print. Internet changed all of that, creating huge opportunities for publishers, but also important challenges with the increased competition for readers’ attention and advertising revenue,” Gingras said.

Read More Google Touts Anti-Piracy Efforts in New Report

Gingras also pointed out that publishers can choose whether they want their articles to appear in Google News.

"The vast majority choose to be included for very good reason. Google News creates real value for these publications by driving people to their websites, which in turn helps generate advertising revenues," he said.

Spain’s Culture Minister Jose Ignacio Wert reacted to Google’s decision by saying that any publisher had the right to allow Google News to include its information for free because it deemed the traffic to the site and the advertising benefits sufficient.

According to Wert, the company had preempted the negotiations with publishers as to how much it would have to pay for using material. Wert told journalists that the government’s goal was to “protect the media” and that “our decision is in line with other legislation and with what the European Union wants to do. The question needs to be resolved in a balanced way between both sides.”

Recently the European Parliament voted to break up Google in response to the Internet giant’s dominant position in the market.

Read More Europe's Antitrust Watchdog Demands More Concessions From Google

Other voices in Spain were clearer in suggesting that Google News was playing hard ball and trying to get publishers to ask to be included in the service.

“Personally, I have doubts about whether the closing of Google News really is in response to said compensation or if it really answers to a business decision that looks to strengthen its position and gain results in other areas that are more attractive for its activity,”attorney Sergio Carrasco, founder of @Derechoenred and specialist in new technologies law, wrote in the Spanish daily El Mundo.

Google is coming strong off a similar situation in Germany, where German publishers' demand for Google to pay for its links backfired, leaving newspapers with no traffic after the aggregator complied with German legislation and dropped all links.

Spain passed the much-debated IP law—known as the Google Tax—in October. The film and television industries have long decried rampant piracy in Spain, but complained that loopholes and vague wording in addition to a skewed focus debilitated the law and would make it ineffective.

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