The Google and Facebook Advertising "Snippet Tax", What's It Really About?

 

Mish

14 hours ago

Australia cracked down on Facebook then relented when Facebook pulled the plug. Let's check in on events in the EU.

Advertising War

Australia and the EU are not happy with US technology companies in general, but in particular Alphabet (GOOG), Facebook (FB), Microsoft (MSFT), and Apple (AAPL). 

This discussion regards advertising giants Alphabet and Facebook. 

Australia and the EU believe the advertising giants are stealing money from other publishers, especially news print,  and/or are unfairly driving such companies out of business. 

Crackdown in Spain

In 2015, Spain decided to tax Google simply for linking to other content. 

Google responded appropriately. It told Spain to go to hell and pulled the plug entirely. Rather than pay companies to promote their content, Google pulled out of Spain, and has been out of that market ever since.

Google Tax

TechDirt has an interesting discussion regarding a Study of Spain's 'Google Tax' on News and how much damage the tax did. 

Governments across Europe, generally at the behest of traditional newspaper publishers, have been pushing for what they call an "ancillary copyright," but which is much better referred to as a "snippet tax" or a "link tax." Belgium was the first country to try it, and Google responded by removing complaining publications from Google News. 

When it came time for Spain to try to appease its misguided and angry publishers, the government sought to avoid the tactics that Google had done in the past and thus made it mandatory to pay, saying that sites themselves couldn't even opt-out of getting payments, even if they didn't want them. In response to this, Google broke out the somewhat surprising "nuclear option" and shut down Google News in Spain entirely. 

After the law went into effect, the Spanish Association of Publishers of Periodical Publications (AEEPP) commissioned an economic study about the impact of the new Spanish ancillary copyright law -- and found (not surprisingly) that the legal change (and the shuttering of Google News and other aggregators) was absolutely harmful to the Spanish news media and innovation in general. 

Google Threatens to kill Google News in Europe

Undaunted by the dismal results in Spain, the EU nannycrats still want to crack down on Google and Facebook. 

Read more: https://www.thestreet.com/mishtalk/economics/the-google-and-facebook-advertising-snippet-tax-whats-it-really-about