New study shows Spain’s “Google tax” has been a disaster for publishers

A study commissioned by Spanish publishers has found that a new intellectual property law passed in Spain last year, which charges news aggregators like Google for showing snippets and linking to news stories, has done substantial damage to the Spanish news industry.

In the short-term, the study found, the law will cost publishers €10 million, or about $10.9 million, which would fall disproportionately on smaller publishers. Consumers would experience a smaller variety of content, and the law "impedes the ability of innovation to enter the market."

The study concludes that there's no "theoretical or empirical justification" for the fee. The full study (PDF) is available for download; it's in Spanish with an English-language executive summary.

The law, which provides for fines of up to $758,000 for violators, was passed in October. Unlike previous attempts to impose a "Google News tax" in Germany and Belgium, the Spanish law doesn't allow publishers to opt out. In response, Google simply closed down Google News in Spain.

Whatever loss of traffic occurs due to readers who may read a news aggregator and then choose not to read an entire story, is more than made up for by the "market expansion" effect, the study found. In other words, given access to a news aggregator like Google, people read much more news.

The NERA analysis found a 6 percent overall drop in traffic from the Spanish Google News closure and a 14 percent drop for smaller publications. Those numbers are slightly smaller than a GigaOm analysis from last year, which found traffic drop-offs of 10 to 15 percent.

One effect of the law, noted by the NERA study, is that it isn't just search giants like Google that have been affected. Some smaller Spanish aggregators, such as Planeta Ludico, NiagaRank, InfoAliment, and Multifriki, shut down entirely, as noted in Techdirt's analysis of some of the Spanish parts of the report.

What remains to be seen is how Spanish publishers will react to this study they have commissioned, which makes the case that their industry has been hurt; and if they decide the law needs reconsideration, whether they'll be able to get the ear of their government.