Google Inc (NASDAQ:GOOGL) said in a blog post Thursday that it would shut down Google News service in Spain on Dec.16. The search engine giant’s move is in response to a new law that comes into effect on January 1. The new law, nicknamed “Google Tax,” will require the Internet giant to pay Spanish news publishers for their linked content or snippets of news.
Google doesn’t generate revenue from the News service
The Mountain View-based company will shut down Google News in Spain and remove Spanish publishers from News sites in other countries to prevent Spanish publishers’ content from appearing on its service. Every month, Google sends more than 10 billion clicks to news publishers worldwide. About one billion of them come from Google News.
The law doesn’t specify how much Google has to pay publishers in Spain. So, the financial cost of running the company’s Spanish News service is unclear. The U.S company argues that it generates no revenue from the News service, making this approach “unsustainable.” Moreover, the company allows publishers to choose whether they want their articles to be included in Google News. Most publishers allow the company to include snippets of their articles because Google News drives a lot of traffic to their websites.
Will Spain regret the move?
Global newspaper publishers and other content providers have alleged that the Internet giant’s online service infringes on their copyright by creating an online selection of story snippets. They have called the company a freeloader. Google began seeking consent of publishers to summarize their articles in 2013 when Germany revised its copyright laws. The German law would have required Google to pay publishers if it published their content.
However, many larger German media outlets, including Axel Springer, have found it difficult to drive traffic to their sites without Google. Therefore, they scrapped a move to block the Internet giant from showing snippets of their articles. Experts wonder if Spain will also come to regret its new law. The U.S. company maintains that it obeys the copyright laws while sending more readers to websites through its News service.
Google shares inched up 0.53% to $530.79 in pre-market trading Thursday.