Will a ‘Google tax’ really pay off?

News aggregation websites are threatening traditional media companies’ viability.

Internet companies that package conventional media news reports are being targeted in new laws. AP Photo
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In recent years, an industry has sprung up on the internet to collect and distribute reports from various media sources – print, radio, television and online. Some of these aggregation websites are beneficial for the media outlets that created the original reports, such as this newspaper, because they get more eyeballs. But others do little for the content-creator because they repackaged without even the courtesy of attribution.

Unsurprisingly then, news aggregators are increasingly in the sights of some countries’ lawmakers, especially with conventional print media in decline because of the internet and the fragmentation of media options. Germany enacted a law last year upholding what is known as ancillary copyright for press publishers. This required aggregation websites to pay those who generated the content. Spain has now followed suit, prompting Google to announce that it will permanently close the Spanish-language version of Google News. The European Union is believed to be considering a similar law. There is a basic principle of fairness here, namely to ensure that those who generate original content profit from their intellectual property. But equally, as Google has argued, it makes no money from its news service. Some might say that Google’s pulling out of Spanish language news shrinks the internet, making the World Wide Web less worldwide.

That said, someone does have to pay to keep the media industry in business and rogue online aggregators who simply profit from others’ work are very bad news indeed. But it is not easy to ensure that rogue aggregators pay their way without penalising the responsible ones. The difficulties became clear after the German law came into force. It was dubbed the “Google tax” because Google News is one of the world’s major aggregators. But most German media companies opted to exempt Google News from paying for their content because it carries no advertising and is seen as beneficial overall. The Spanish law does not allow such waivers. The challenge for lawmakers in the EU and beyond is how to strike a balance between traditional and internet-based media.