WASHINGTON, August 1, 2014 — Spain’s congress this week passed a law nicknamed the ‘Google Tax’ which requires any content aggregator to pay fees to the original publisher.
The law, part of a Copyright Reform Act, came after years of Spanish newspapers complaining that Google News and other large aggregators exploit them by using their stories to stock their news feeds. Under the new law, Spanish editors have the “inalienable right” to tax any Internet site that links to its stories. Aggregators who list “a link and a meaningful description” of an article will have to pay the original publishers a fee.
The government estimates it will raise more than $100 million in revenue.
Critics say the law shows general lack of Internet understanding by both the Spanish government and old-school newspapers. They note that the aggregators actually help news sites by directing readers to their stories. Google, they say, drives readers to sites they would likely not have visited if Google had not included it on their feed.
Others are concerned about ambiguities in the law. It is unclear when the legislation would take effect and exactly which sites it would target. For example, the Culture ministry has said social media users would be exempt from the tax, but others suggest Facebook and Twitter are ruled by the legislation.
Germany passed a similar law in 2013, but that law has little impact since editors opted not to collect the tax. That law prompted Google to launch a campaign called “Defend Your Net.” In a short video, Google warned users “for more than 10 years you’ve been able to find what you are looking for” but the new law “would change that.”
The EU as a whole does not have a similar law, but it has taken aim at Google on a number of fronts. In 2011, a court in Belgium ruled that Google infringed on the copyright of a Belgian newspaper. The EU has also investigated “right to be forgotten” claims and hammered Google on privacy issues. Taxing authorities are also investigating Google for locating to Ireland to take advantage of notoriously low corporate tax rate.
Spain’s Senate is likely to vote on the law in September. If passed, Google has threatened to shut down Spanish Google News completely.