The predictable result of Spain’s “Google tax”: No more Google News

Google News will shortly shut down in Spain, the first time the news-search service has abandoned an entire national market. The move is a response to Spain's new intellectual property law, which would require Google to pay publishers in that country for publishing even small excerpts of their content.

The head of Google News, Richard Gingras, explained the decision in a blog post earlier today, which reads in part:

Sadly, as a result of a new Spanish law, we’ll shortly have to close Google News in Spain. Let me explain why. This new legislation requires every Spanish publication to charge services like Google News for showing even the smallest snippet from their publications, whether they want to or not. As Google News itself makes no money (we do not show any advertising on the site) this new approach is simply not sustainable. So it’s with real sadness that on 16 December (before the new law comes into effect in January) we’ll remove Spanish publishers from Google News, and close Google News in Spain.

The law didn't specify how much Google would have had to pay the publishers, but it allowed for a fine of more than $750,000 if the law was violated.

The Spanish Ministry of Education, Culture, and Sport published a response (Spanish) calling the Google News closure a "business decision" and emphasizing that the newspapers' websites were still available directly, as well as through Google's regular search.

The Spanish "Google tax" effort followed shortly after German publishers gave up their effort to get an 11 percent cut of gross revenue from Google News.

Technically, there's still a "Google tax" in effect in Germany, but it was up to individual publishers to try to collect, and they have generally given up on such efforts. In October, VG Media group said it would go ahead and grant Google a "free license."

German publisher Axel Springer told The New York Times today that when it was de-indexed, it experienced a 40 percent drop-off in traffic from Google’s search and an 80 percent drop from Google News.

Unlike the German rule, which allows publishers to take action against Google if they choose to, the Spanish law would have required payment to all publishers.