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Google News Says Adios to Spain

Google Spain office sign, with a worker, three-quarter view
photo by Enrique Dans

Publishers have every right to control how the content they produce is used or displayed. That does not mean every choice they make will be a good one.

If Spain’s news outlets do not want Google to display their wares on its virtual shelves, that is their prerogative. But I think they may rue the day.

Earlier this month, Google announced it would shutter its Google News service in Spain, due to newly enacted legislation in that country. The law in question allows Spanish publishers and newspapers to charge search engines each time even a snippet of their content appears in a search. Google has argued that Google News - which is free of advertising, unlike standard Google searches - provides a service to publishers by driving traffic to their sites. Spanish publishers responded that the layout of Google News and the amount of content it displays is a parasitic and uncompensated use of their content, and they want to stop it.

The Washington Post reported earlier this month that the Spanish publishers are supported by the European Newspaper Publishers’ Association, which suggests Spain may not long be the only country to try to impose this so-called “Google tax” (which applies to any similar venue, not just Google). Media officials in Germany, Austria and Poland are reportedly keeping a very close eye on the Spanish law’s implementation. For now, Google isn’t budging. It expressed regret at having to shutter the service, which closed this week, but says it has no intention to pay for Spanish news.

This decision cuts both ways. Internet users in Spain will no longer have access to Google News, and Internet users everywhere else who open Google News will not see content from Spanish publications. Users can still reach Spanish news sites through regular Google web search, however, since the law affects “news aggregators,” not search engines as such.

Of course, there are many non-Spanish outlets that provide news - even Spanish news. I don’t think Google’s Iberian news traffic is necessarily going to dry up just because Spain’s publishers now have the legal right to collect royalties on what amounts to a simple expansion of Google’s search results. But Google will no longer deliver readers to Spanish publishers’ Internet doorstep.

For instance, I opened an El Pais article last week as a test. The link I found through Google News (prior to the Spanish news site shutdown) opened its own tab in my browser, complete with English-language advertisements for AARP, because I accessed the site from New York. El Pais thus earned some advertising revenue from an audience outside Spain, even with Google News as a point of origin. Some of that audience may be regular El Pais readers, who could continue to go directly to the newspaper’s main site to peruse the headlines regularly. But I suspect a lot of them will simply go to outlets on other news sites instead, including Google’s non-Spanish sites, to get their news about Spain. Or they may not bother with traditional news outlets at all.

Google eventually might even decide to set up its own news service, in Spain and elsewhere, rather than continue to aggregate the news published by other sites. It certainly has the financial resources to do so. It also has the audience. How will Spanish news outlets feel if Google becomes a general-interest version of Bloomberg, serving up its own self-generated news content? By cutting themselves off from Google News’ search results and the accompanying audience, Spanish publishers may have opened a door for an extremely powerful competitor. If you think that scenario is far-fetched, consider that Amazon founder Jeff Bezos now owns The Washington Post.

Spain’s news outlets got what they wanted, more or less, from Google. In the long run, though, this may prove to be one of those cases where it is very important to be careful what you wish for.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

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