Google is shutting down its news product in Spain rather than pay publishers for using snippets of their content.
A new intellectual property law in the country requires every Spanish publication to charge services like Google News for showing even small news snippets from their publications, whether they want to or not, Richard Gingras, head of Google News said in a blog post Wednesday.
The new requirement does not work for Google because its news portal does not make any money, as it does not show advertising on the site.
The company is not only shutting down Google News in Spain by Dec. 16, ahead of the law coming into force in January. News from Spanish publications will not appear on the global Google News site.
The new Spanish law aims to protect copyright holders in a digital environment, and makes it an inalienable right for publishers to receive compensation from aggregators for the use of fragments of content in news and other contexts.
The Internet has created "tremendous opportunities but also real challenges for publishers as competition both for readers' attention and for advertising Euros increased," according to Gingras.
In Germany, publishers who were looking for compensation for republication of their content backed off after Google decided to stop showing news snippets and thumbnails for some well-known German news sites in search results.
The publishers said in October that in view of Google's market power they would allow the company to show news snippets in search results free of charge.
Google holds that it benefits publishers by directing traffic to their websites through Google News, and the move in Spain will likely be seen as retaliation against the new legislation, which was backed by publishers group Spanish Association of Daily Newspaper Publishers (AEDE).
Publishers can "choose whether or not they want their articles to appear in Google News -- and the vast majority choose to be included for very good reason," Gingras wrote.
In the Spanish law, the right to compensation cannot be renounced by the rights holders.
The legislation in Spain adds to Google's considerable problems with legislators and regulators in Europe, including a nonbinding vote in November by members of the European Parliament asking the European Commission to consider splitting up the company in to a search business and another business around its other products. The commission is investigating Google for possible antitrust violations.