Google (NASDAQ:GOOGL) Drops its News Segment in Spain


Google (NASDAQ:GOOGL) has decided to close its News segment on Spain. This is due to a law that was passed in July. This ruling restricts any news publishers that quote parts of text or use thumbnail images from a copyright publications will need to make certain payments in royalties.

According to a recent blog post, the current Google (NASDAQ:GOOGL) news chief, Richard Gingras has revealed that the portal is not used to advertise for the company, hence no returns are generated. Hence, the company feels it unwise to continue this service in Spain. This law is expected to be implemented officially in January. Google (NASDAQ:GOOGL) plans to close its News service on Dec. 16.

This decree is called ancillary copyright law. In the European region, Spain is not the only country to have implemented it. Back in March, 2013; Germany also passed a similar ruling, with much more strict terms and conditions.

According to the German law, it is actually publishers who have the option to grant permission to platform similar to Google (NASDAQ:GOOGL) News portal, whether or not, they can quote the news snippets or copy their thumbnails without paying. This drove Google (NASDAQ:GOOGL) to refuse royalty payments. Hence, the company had to stop copying news data that was published by the group that favoured receiving compensations. However, not without complaining about it, these publishing groups finally caved in and allowed Google (NASDAQ:GOOGL) to use their content without any payments. They did submit and claimed that it was due to the immense power Google (NASDAQ:GOOGL) exercises in this media.

Google (NASDAQ:GOOGL) may not have it this easy on the Spanish soil though, where the tax law is unchallengeable. The publishers here don’t have the option to pass on their content for free, even if they wanted to. The Weblogs CEO, Julio Alonso states that it even applies to the likes of Creative Commons and similar companies that post information under no copyright.

This is not the first time that Google (NASDAQ:GOOGL) has had a brush with the European law. On two similar occasions in the past, Google (NASDAQ:GOOGL) shook on a deal with Belgian publishers and bought advertising that was worth millions of dollars. Additionally, in early 2013 the company also launched a fund for French publishers. This supported initiatives related to digital publishing.

Actions are being driven to extends this Google (NASDAQ:GOOGL) Tax law to the rest of the European Union. The regions current digital economic chief is not very pleased with the fact that the company gets away without making any payments for all intelligent data it uses for free.

To some, it seems that the European Union seems to implement several laws that restrict American firms to establish themselves with independence that they seem to enjoy on local front. The Publishers in Spain might suffer a dramatic drop in browsing, due to this strict law. However, the authorities are unmoved, and even though, they may seem over protective than anywhere else in Europe, they stand firm on their decision.