Google’s had a tough year in Europe. After the Right to Forget, a threatening resolution from the European Parliament and a dodgy lawsuit, the American search giant is also the butt of a new law in Spain—and this time, Google is taking its toys and going home.
Spain, like many European countries, takes umbrage at Google’s market dominance. Accordingly, the country has looked for ways to shave Google down to size or at least extract more revenue from it. That seems to be the motive behind Spain’s new copyright law, which was essentially written just for Google.
The new law says that Google has to pay licensing fees to Spanish media companies every time it uses their content in Google News, including just snippets of content. That goes against the norms of international copyright law, under which the use of short excerpts is considered fair game. It also ignores the fact that Google is simply indexing the content and sending users to the Spanish companies’ websites, not republishing anything.
Those arguments irrelevant, however, as the law has been passed and goes into effect on January 1. But Google isn’t going to follow it, or violate it for that matter, as the company has decided to just close Google News in Spain instead.
The closure works on two levels: Spain’s version of Google News will be shuttered completely, while news stories from Spanish companies will be purged and excluded from all other versions of Google News around the world.
That’s a direct counterblow to Spain’s hostility: not only will Google pay zero licensing fees, but Spanish media companies will lose substantial traffic with the closure. In other words, the law’s only effect is to damage Spain’s own economy.
Of course, Spanish media companies end up paying the price, but Google had little choice. Unlike a similar law in Germany, the Spanish law doesn’t allow companies to waive their licensing fees, so Google couldn’t even work with media outlets on a one-on-one basis to trade traffic for free use.
Spain is calling foul play on Google’s pullout, but the move is legal and Google justifies it by cost. Google News brings in no revenue for the search giant, so paying out licensing fees would be a loss it can’t afford.
As a secondary effect of the law, it will be hard for any homegrown Spanish or European tech company to take Google’s place, as that company would also have to pay the mandatory licensing fees. It’s likely that Spain will simply have relatively weak online news services for the foreseeable future.
Google’s decision is more than just the smart move locally in Spain, however. It’s also a bold tactic that sends a strong message to Europe about its increasingly aggressive regulation. Europe has not produced strong tech companies on the scale of Google, Yahoo or Microsoft, and European consumers are happy to use Google’s services. Google is signaling that it’s willing to shutter much-needed services rather than play ball with unreasonable laws.
Of course, Google’s Spanish search engine and all its other European services remain open and operational. There’s almost zero chance that Google will “go nuclear” and blackout its European services entirely, a move that would cost billions. But the search engine does have substantial leverage, and Europe is going to overcome that a lot more effectively through competition than through regulation.
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