Google Inc (NASDAQ:GOOGL) may seem the obvious victim as Spain enacts a law that allows publishers in the country to charge websites such as Google News that use their content. However, Alex Barinka on Bloomberg’s Street Smart thinks that it might be the other way around.
The comment comes after Google Inc (NASDAQ:GOOGL) revealed that it will shut down its Google News service for Spain starting December 16. Known as the LPI law, the measure was passed late in October and will take effect on January 2015.
“With this though, the companies that could be in trouble [are] actually the publishers. We saw a similar tax in Germany, where the onus was on the publishers to come to Google. But Axel Springer [AG], a German publisher, told The New York Times that they saw their web traffic drop off 40% on Google [and] 80% on Google News when they were pulled out of that search bar there,” she said.
Because of this effect that Google Inc (NASDAQ:GOOGL) has on publishers in countries where it pulls out, the onus could be on publishers to ensure that their content is seen, Barinka argued. Consumers are using Google whether or not the tech giant is running into these privacy issues, she said.
The Spanish law is only the latest in a collection of struggles the company is facing in Europe which includes fighting the now-infamous “Right To Be Forgotten” law. It imposes a maximum fine of up to 600,000 euros for services like Google News which refuse to pay for content that they use from Spanish publishers.
Google Inc (NASDAQ:GOOGL), the owner of several of the world’s most visited websites, has been adamant in opposing the LPI law, saying after its passing that it is in their belief that services such as Google News actually drive traffic to publishers’ websites.
Andreas Halvorsen’s Viking Global is a Google Inc (NASDAQ:GOOGL) shareholder with a stake of 923,500 shares in the company by the end of the third quarter.