Google's unstable relationship with Europe deteriorated further on Thursday with the company's announcement that it plans to shut down Google News in Spain.
Richard Gingras, head of Google News, said in a blog post that a new Spanish law requires that all Spanish publications charge online news aggregators for showing even the smallest portion of a news article.
Because Google News shows no ads and makes no money, said Gingras, the legally mandated fee "is simply not sustainable." As a consequence, Google plans to remove Spanish publishers from Google News on Dec. 16 and to close Google News in Spain.
The Spanish law will take effect in January amid EU antitrust investigations of Google's search and Android businesses and the EU's controversial "right to be forgotten." It's designed to protect businesses in Spain that depend on intellectual property, which generate 4% of the country's gross domestic product.
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Whether Gingras's accounting captures the fair value of Google News remains open to question. In 2008, according to Fortune, Marissa Mayer estimated that Google News drove $100 million of revenue by leading users to ad-supported Google Search. Google didn't immediately respond to a request for comment.
For Spanish publishers, the absence of Google News referrals is likely to mean fewer online visitors and less ad revenue, at least in the short term.
The Spanish copyright law has been characterized as a "Google tax," but its impact is likely to be far broader. Because its use fees are mandatory, it threatens the free use of content that authors have placed outside copyright regimes through the application of a Creative Commons license.
Google has been dealing with publishers' efforts to obtain greater compensation for years. In 2006, Belgian publishers sued Google over the inclusion of snippets from their articles, despite the availability of a technical means to opt out. Google complied with their demands and delisted them. Faced with diminished online traffic, the publishers wanted back in.
After suing Google in June for using news snippets without consent and Google's response of removing the publications from Google News, the German publishing group VG Media relented in October and agreed to allow Google News to include news snippets from members' websites without charge.
In a press release, the German consortium acknowledged the financial strain of being delisted in Google News and said it had backed down only because of Google's market dominance and the prospect of bankruptcies. Despite that concession, the group continues to pursue litigation seeking 11% of gross revenue related to the use of its members' content.
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