Should the "Google Tax" come to the UK?
Google is currently facing a decision in Spain on whether it should pay tax on the newspaper content it accesses. Spain passed a law which says that from 1 January 2015, Google will have a pay a fee to the Spanish newspapers for linking to their material or else face a fine of up to €600,000.
Google’s mission statement is to "organize the world's information and make it universally accessible and useful". The incredible success it has achieved in its mission mean it is by far the world’s most powerful “web aggregator” and the gateway through which the majority of web users find the websites they are looking for. This includes the world of news, an industry which has suffered as a result.
But the industry, and particularly the long-established newspapers who have seen print revenues wane, has had to adapt like everyone else. They have had to replace the income lost from print with income from their online presence. Some have chosen user paywalls as part of their revenue strategy. Others, in contrast, have remained free to access and relied almost principally on advertising.
What about Google?
So what about the possibility of raising money from Google, the service that directs most online traffic? Should Google be made to contribute? Plenty of newspapers agree with the idea, as do politicians. A key reason why, is that Google is using the intellectual property at the heart of newspapers – copyright – as part of its service to end users. But it is doing so without paying for the privilege.
By retrieving, recording, indexing and storing the mass of publicly available material that is online on its servers, Google is including the newspapers' copyright-protected material. Google is then disclosing the relevant parts of this material to an internet user in the form of search results which typically include the headline of each webpage "hit", a link to the webpage and an excerpt from the webpage with the search term in some context. Such activities may amount to an infringement of the newspaper's copyright under current European laws. However, the legal position is not straightforward and rather than having to litigate the print media would prefer the law to be reformed in their favour.
Spain isn’t the first to try…
In Germany, this led to a new intellectual property law in the favour of the newspaper industry. It required news aggregators, such as Google, to pay fees to newspaper owners for the use of their copyright-protected material. But in reaction to being sued over it, Google simply removed the material from its search results. When traffic to the newspaper websites fell off the cliff, the newspapers had little option but to go cap in hand to Google and ask it kindly to put them back "online". Needless to say, the newspaper owners waived the fees they should have been due by law.
A similar result happened in 2011 when Belgium newspapers attempted, off the back of a Court Order, to force Google to pay Court-imposed penalties for linking to their material online. Google resisted and decided instead to remove their links from its search results. Web traffic for the newspapers disappeared overnight. The situation was only resolved once the newspapers relinquished the Court penalties and allowed Google to continue as before.
Google has been largely restrained in its public response to date but few commentators believe that the matter will end up any different to those that have gone before in Germany and Belgium – Google is simply too influential, has made nonsense of similar laws and everyone knows it.
The tax is also in conflict with one of the fundamental ideas that material which is freely accessible online can be shared by links (whether posted on social media or any other website or in private) and appears to be out of sync with European policy in this area.
In those circumstances, it is hard to see the point of introducing something here in the UK which is destined to fail.
But if we did consider it, the proper reasoning, as this is about copyright, is to make Google pay a fee to all owners of the copyright-protected material (i.e. not just newspapers) that it uses in its search engine.
However, would other copyright owners even want it? Take two major copyright industries: music and film. They are concentrating on using Google to their advantage and with its help, targeting those unlawfully copying their material. They aren't chasing this tax, and raise revenue by restricting access to their content with paywalls or accompanying it with advertising, which the majority of users accept.
Ultimately, imposing such charges on Google threatens to restrict the benefits of what is a remarkable service for the internet and its user, and could be the thin end of an undesirable wedge.