New study shows Spain’s “Google tax” has been a disaster for publishers

A study commissioned by Spanish publishers has found that a new intellectual property law passed in Spain in 2014, which charges news aggregators like Google for showing snippets and linking to news stories, has done substantial damage to the Spanish news industry. In the short-term, the study found, the law will cost publishers €10 million, or about $10.9 million, which would fall disproportionately on smaller publishers. Consumers would experience a smaller variety of content, and the law "impedes the ability of innovation to enter the market." The study concludes that there's no "theoretical or empirical justification" for the fee.

The law, which provides for fines of up to $758,000 for violators, was passed in October. Unlike previous attempts to impose a "Google News tax" in Germany and Belgium, the Spanish law doesn't allow publishers to opt out. In response, Google simply closed down Google News in Spain. Whatever loss of traffic occurs due to readers who may read a news aggregator and then choose not to read an entire story, is more than made up for by the "market expansion" effect, the study found. In other words, given access to a news aggregator like Google, people read much more news.