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Google May Have To Pay Licensing Fees In Europe

March 26, 2016 - Written By Kishalaya Kundu

Google’s troubles with regulators and watchdogs in Europe don’t seem to end. After falling foul of tax authorities, competition watchdogs and data protection agencies in one country within the continent or another, the search giant may now be forced to pay licensing fees to European newspaper publishers to carry portions of their articles on its popular news aggregation service – Google News. The European Commission’s new proposal, which is still in the deliberation stage, would grant “neighboring rights” to publishers, which will require not just Google, but all news aggregation services to pay a fee if they want to carry even small excerpts of articles published by European publishing houses on their websites. Faced with similar legislation before, Google has chosen to shut down its news services rather than paying any fees, and is expected to do the same this time around as well, if such a directive is indeed issued.

While the EU is currently holding public consultations on the matter, critics of the idea are already pointing out a number of reasons on why it might be counterproductive to charge Google for its news aggregation service. Among the initiative’s loudest and most prominent critics are many of the publishers themselves, who are up in arms against this proposal, fearing a reduction in web-traffic that comes by way of links on Google. According to an open letter issued last year by a consortium of European publishers, “such proposals make it harder for us to be heard, to reach new readers and new audiences. They create new barriers between us and our readers, new barriers to entry for news publishers such as ourselves”. There is already enough evidence to suggest that such fears are far from unfounded, as was evident after a similar legislation in Spain forced Google to shut down its news service in the country, leading to a lot of the publishers there losing a significant amount of traffic.

Publishers and legislators in some European countries realize that taxing Google for carrying news snippets on its site is not exactly the brightest of ideas and can do more harm than good to the very publishers who this initiative is supposed to help. Germany is one such example where a law passed in August 2013 granted publishers “the right to license their content or parts thereof, except in the case of single words or very small text snippets”. However, with the search giant removing the news snippets from its Google News service, traffic to those websites fell dramatically, leading the consortium of over 200 publishers to grant Google a free license to use portions of their articles on Google News, saying that the extraordinary step was unavoidable because of the “overwhelming market power of Google”.