Google Inc.’s share price down, to close Google News in Spain due to new copyright legislation

Google Inc. announced that its news portal in Spain is planned to be closed due to new copyright legislation, which allows publishers charge Internet companies for their content that is being collected from other websites. The owner of the largest search engine in the world revealed in a blog post that Google News in Spain will be shut on December 16th.

The Chief of the news service of Google, Richard Gingras, explained that the action is to take place literally right before the new law takes effect in January 2015.

Mr. Gingras wrote in a blog post, cited by the Wall Street Journal: “As Google News itself makes no money (we do not show any advertising on the site) this new approach is simply not sustainable.” As reported by Bloomberg, he also said: “We’re committed to helping the news industry meet that challenge and look forward to continuing to work with our thousands of partners globally, as well as in Spain, to help them increase their online readership and revenues.”

The new legislation law that is to be implemented in Spain puts some extra pressure on Google in Europe, where it has been lately facing criticism over its tax payments and data-handling practices. A law to tax companies, which base their operations overseas to bypass British taxes, was proposed by the U.K. government.

The new copyright law in Spain is to come into effect on January 1st 2015. Under the law, news collectors will be forced to pay certain fees to publishers for content they link to. Not applying the law could lead to a fine estimated to up to €600 000.

Search engines or social media websites that direct large amounts of traffic to news websites were reported to not be aimed by the Spanish law. However, Google News is different from the search engine of the U.S.-based company and primarily links to content from publishers in the country where the reader is based.

Google Inc. was down 1.43% to close at $528.04 per share yesterday, marking a one-year loss of 2.73%. The company is valued at $362.75 billion. According to CNN Money, the 43 analysts offering 12-month price forecasts for Google have a median target of $640.00, with a high estimate of $750.00 and a low estimate of $530.00. The median estimate represents a +21.20% increase from the last price of $528.04.