The “Google Tax” In Germany Is A Good Thing. Unless It’s Not. Discuss. (Updated)

This could be the first in a series of Europe-wide copyright taxes, which would scare up some much-needed government revenue. But what does it mean for innovation and a free Internet?

The “Google Tax” In Germany Is A Good Thing. Unless It’s Not. Discuss. (Updated)

It looks like Germany will be the first place to implement a so-called “Google tax,” after its parliament passed a law forcing search engines and news aggregators to pay royalties to publishers for providing news snippets. The search engine firm has fought long and hard against the concept in other territories, but, with the law a whisper away–even though the country’s opposition party will try to defeat it in the Bundesrat, Germany’s second legislative chamber–it could be the beginning of the end of the fight.


Update: The law seems to be overly complicated and a bit odd. For the first year, only the parent publishing firm from which the content originated can share its pages, unless someone pays for it. Google and other such search engines are exempt from the charge, provided they use “single words or very small text excerpts” that refer to publishers’ websites. After a year, it’s a free-for-all. So what it seems like you’ll see will be small links and snippets, rather than links and small paragraphs. Not quite the victory for German publishing groups such as Bertelsmann and Axel Springer that the original story suggested. Google’s Head of Free Expression for Europe, the Middle East, and Africa, William Echikson, emailed Fast Company with a statement from Ralf Bremer, Google Germany spokesman.

“As a result of today’s vote, ancillary copyright in its most damaging form has been stopped. However, the best outcome for Germany would be no new legislation because it threatens innovation, particularly for startups. It’s also not necessary because publishers and Internet companies can innovate together, just as Google has done in many other countries.”

This is a major win for Google, despite the fact that it would have preferred no change in the law whatsoever. The firm managed a cool $50 billion in revenue in 2012, so even if it had had to start paying royalties to the sources of its search engine results, it would have the wherewithal. Inevitably, there will be similar laws in other European territories, but what happens when one country does decide on charging search engines for their links? Will Google decide that it’s time to start charging the man on the Net for services which, for the past 15 years, have been free? The firm’s revenue from its online display ads is currently the biggest in the world, with a 15.4 percent market share, just surpassing Facebook, which enjoys a 14.4 percent.

In 2012, the firm agreed to a “partnership” with Belgian newspaper publishers, agreeing to shovel an estimated $6.5 million in compensation in the form of press advertising in their direction in order to stave off a copyright tax. This came out fighting in Google’s ongoing spat with Belgium’s neighbor, France, which is trying to pass legislation to make search engines pay for content and said it would remove all Gallic sites from its search field. One of France’s other grandes idées is to tax Internet companies for data mining–something that would hit big organizations such as Google and Facebook, which have advertising revenue that depends on collating their users’ personal information.

What are your views on a so-called “Google tax”? Germany’s new legislation is messy, complex, and short-sighted. Is it the publishing companies who need to learn to innovate a bit more? Or do you feel that it’s high time Mountain View started paying for content? How do you see this playing out for the average Internet user? And could you see this happening in the United States? Go ahead and comment. It’s tax-free!

[Image by Flickr user Ana Paula Hirama]

About the author

My writing career has taken me all round the houses over the past decade and a half--from grumpy teens and hungover rock bands in the U.K., where I was born, via celebrity interviews, health, tech and fashion in Madrid and Paris, before returning to London, where I now live. For the past five years I've been writing about technology and innovation for U.S.