Google News Quits Spain After Tax Row

An illustration picture shows a Google logo with two one Euro coins, taken in Munich. Michael Dalder/Reuters

Internet search engine Google's news service, Google News, will no longer operate in Spain as of 16th December. The move comes after Spanish lawmakers passed a bill banning Google News and other news aggregating services from accessing, ranking or linking to news stories on the sites of Spanish publications due to copyright violations.

The law, drafted by Spain's Ministry of Culture, said that as of 2015, the Spanish government will tax these services extra for using and aggregating content from Spanish magazines or newspapers.

Madrid's decision prompted a quick response from Google News executive Richard Gringras, who announced that the company will be shutting down their operations in Spain on Thursday.

"It's with real sadness that on 16th December (before the new law comes into effect in January) we'll remove Spanish publishers from Google News, and close Google News in Spain," Gringras wrote on his blog.

"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," Gringras added. "As Google News itself makes no money (we do not show any advertising on the site) this new approach is simply not sustainable."

Spain's Ministry of culture has played down political interpretations of the situation, saying Google's decision was "a business decision", and assuring Spanish citizens that their freedom of access to information on the internet will "continue to be guaranteed".

Spain's culture minister José Ignacio Wert assured press that Spanish internet users will still be able to access the same information once available through Google News, both on the sites on which they're published and through search engines. "The new intellectual property law in no way impedes the freedom of information, within the boundary that is respectful if the author's rights to intellectual ownership."

The new law, tabled initially in October by members of Spain's ruling PP party, had not specified the amount of tax Google would have to pay to rank Spanish content on Google News.

However, the law did explicitly express that the tax would apply to news aggregators, regardless of whether they hosted adverts or not, on the basis that such services reproduced information in outlets designed to inform public opinion or entertain.

The law was agreed with by the Association of Editors of the Spanish daily press (AEDE) and is the latest amendment of Spain's intellectual property laws for the press dating back to 1987. Editors from the group, which is in charge of Spain's largest print outlets hailed the law as "a crucial event in which the Spanish government has given greater protection to the press".

Google's presence in Europe has been a point of contention recently as other countries have undertaken similar, albeit less severe measures, to Spain.

Germany, France and Belgium have put in place regulation for news aggregators, although Google News continues to function in each of those countries. Germany voted to tax companies who use content from German news outlets online, but the law dictates that the decision is optional and lies in the hands of the publishers.

Axel Springer, one of Germany's largest publishing houses, was among those who did decide to impose the tax on Google, but have since reversed this decision. Their chief executive Mathias Döpfner has spoken at length about the repercussions of the decision.

Döpfner said Axel Springer experienced a 40% fall in traffic to their publications directed from Google's search results, and an 80% drop in traffic from Google News.

In France, when a similar law was being debated in 2013, Google offered to meet with editorial unions, paying them €60 million in a bid to help them towards 'digital transition' which seemed to diffuse the tension between both parties.

The impact that this new law will have on Spanish publications is yet to be seen and Google have not suggested they will limit services other than Google News in Spain. However, according to the Californian company, its news service plays a huge part in promoting online content, securing some 10 billion clicks a month to publications globally.

Google's relationship with the EU has recently grown more strained, as the European Parliament announced it is discussing plans to potentially break up the company's operations in Europe amidst fears it is undermining competitors and using user's private data for advertising purposes without expressed consent.

A vote in European Parliament is currently due to be scheduled on whether further regulations need to be imposed on Google's activity in Europe.