Closing Google News Has Become a Disaster for Spain

Last year I wrote about how Google blatantly thumbed its nose at a new “link tax” in Spain. The scuffle ended with Google taking its toys and going home, leaving Spanish internet users unable to peruse Google News over their morning café.

If anyone in Spain was cheering then, they aren’t now. The loss has become a disaster for the Spanish economy.

The Price of News

The source of the conflict was ire from Spanish publishers over Google News, an aggregator service. Although the service drove traffic to their sites, they also feared that its use of snippets of their articles allowed users to read for free without clicking.

Pressure from media companies led to a new law in Spain, now popularly called the “link tax.” The link tax required aggregators like Google to pay a fee every time they showed a snippet. It was spun as a licensing fee for copyrighted material, even though the snippets count as fair use under international copyright law.

Instead of paying the fee, Google shuttered Google News Spain altogether. And things have not been the same since.

The Loss of a Channel

Spanish media sites felt the loss of traffic immediately, tangibly proving that Google’s snippets had actually boosted, not harmed, the sites’ user base. They actually asked the Spanish government to force Google to re-open News and pay the fees, but that didn’t work. The result is that the entire Spanish news industry lost access to one of the most lucrative distribution channels in the world.

How badly has that hurt them? It’s created a perfect storm of negativos:

• Spanish language news sites from other countries have full access to Google News. Spain’s media industry is at a competitive disadvantage.
• Newer or smaller Spanish outlets struggle to grow. Google News is an excellent way for indie news sites to find readership, but in Spain they are deprived of this; growth of the industry overall has slowed.
• New tech companies avoid Spain. Successful startups Zite and Flipboard, for example, took a pass on Spain while expanding to the rest of Europe. Spanish users have less access to innovative new services.
• At least in theory, Spanish residents can look at other nations’ version of Google News to get their fix (Google has made it harder for EU residents to reach outside versions of the site). Thus, at least some consumers may be abandoning the Spanish news industry altogether.

And of course, it isn’t just Google News that closed or left. Major Spanish and European distribution companies have all called it quitsies in Spain.

The only solution for Spain? Repeal the link tax and court Google and other tech/media companies back. But so far, that is not in the cards.