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Spanish News Publishers to Google News: You Can Check Out, But You Can Never Leave

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As noted in our two preceding posts about the introduction of the “ancillary right” in Spain (here and here), Google announced it would discontinue operation of the Google News product in Spain, starting tomorrow, December 16.  (Wired UK cites a potential fine of up to €600,000 (~$746,000) for non-compliance after the January 1 deadline.)  In a statement, the Spanish Government shrugged off the company’s response to the “so-called Google tax” as a “business decision.”

Google’s decision surprised no one save perhaps the Spanish news publishers’ association (AEDE).  Responding to the announcement, the AEDE released a statement last week arguing that Google had a dominant position in the news market, and demanded that it not be permitted to exit the market.  Note that the data doesn’t seem to bear this assertion out; relying on data from Similarweb.com, it appears Google.news.es ranks 226th in Spain, miles behind Elpais.com at 16th, and elmundo.es at 18th.  If one limits the data strictly to news media, Google News Spain is still bringing up the rear (at 26th) behind yahoo.com (1st), elpais.com (3rd), msn.com (4th) elmundo.es (5th), and abc.es (7th).

In any event, the association’s about-face epitomizes its love-hate relationship with news search and aggregation: its members love the free traffic that they drive to publishers’ ads, but hate that news search providers and aggregators don’t pay for that privilege.

There is no sound principle of antitrust law that would compel a business to remain operating in a given market — operating at a loss, no less.   No competition authority is likely to seriously entertain such a confiscatory order.  But even if such a remedy were available under antitrust law, the Spanish National Authority for Markets and Competition (Comisión Nacional de Mercados y Competencia (CNMC)) has not been a sympathetic ear thus far.  In a May 2014 report (English translation here), the CNMC argued that the then-pending ancillary right law could significantly harm competition in Spain for new aggregators and news publishers.  It noted that the snippet levy would form a new barrier to entry as new publishers would be unable to waive the right.  It also observed that the collecting society contemplated by the law might itself restrict competition, and that it, along with the unwaivable nature of the right, should be removed from the proposed law.

Spain’s competition authority wouldn’t be alone in rejecting news publishers’ bid to force news aggregators to buy a product they’re unwilling to purchase; the German competition agency reached a similar conclusion, as DisCo noted back in October.  Following enactment of the German ancillary right, German publishers had similarly insisted that Google resume the display of news content that it had delisted, and also pay for it.  These demands also went unfulfilled.

If there is a lesson to be learned here, it may be this: getting governments to compel enterprises to pay for a product that they’re not otherwise inclined to purchase is a bad business model.

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