Spain’s Aggregation Tax Has Screwed Over the Media It Was Made to Protect

A study found linking out to excerpts actually expands the market for original news sources.

Jul 30 2015, 6:56pm

Photo: Carlos Luna/Flickr

A law Spain passed in October 2014 charging online aggregators like Google News a fee for linked content has backfired, according to a new study.

The legislation, which went into effect January 1 of this year, requires aggregation sites to pay a fee to original publications when posting links or excerpts from them online. The law, which caused Google News to shut down in Spain, was pushed by the Association of Editors of Spanish Dailies as a means to protect the print industry. But the study commissioned by the Spanish Association of Publishers of Periodical Publications (AEEPP) found it has been harmful to Spanish media at large,

"The negative impact on the online press sector is also very clear, since a very important channel to attract readers disappears, resulting in lower revenues from advertising," the study said.

The report found clear evidence news aggregators actually expand the market for original sources rather than diminish it. It also showed the law disproportionately hurt smaller publications that relied on Google News and similar aggregators for traffic.

In addition to Google News, other aggregators including Planeta Ludico, NiagaRank, InfoAliment, and Multifriki shut down for fear of legal and financial liability. Companies that don't pay the tax could face fines of up to €600,000 or $654,480.

The shutdown of these sites, particularly NiagaRank, was a blow to innovation in Spain, the report stated.

"This case is remarkable because NiagaRank was not a 'traditional' aggregator, but it analysed social networks to draw up lists with the most relevant news ("active listening", as they used to call it)," the report said. "However, it is an example of the legal uncertainty that the lack of definition of key aspects of the act has caused."

The failure of this law to protect the print media as it was intended to may serve as a broader lesson, as other countries in Europe mull over similar legislation.