UPDATED 12:00 EST / MARCH 04 2013

NEWS

German Lawmakers Rule Out “Google Tax” for News Snippets

There was some good news for Google in its battle with European publishers at last, as Germany’s Bundestag voted in favor of an amendment to the country’s Leistungsschutzrecht act that previously allowed publishers to charge search engines for content re-published by news aggregators.

Before the vote was taken, the proposed Leistungsschutzrecht gave German publishers the right to charge aggregators like Google News for linking to their stories, even if all they displayed was “very small text excerpts or single words” from the original text. However, following some heavy campaigning by Google, lawmakers have now decided to rescind that right in favor of the search giant and other aggregators, allowing them to republish ‘snippets’ of content.

There is still plenty of room for argument though as questions remain about exactly what constitutes a ‘snippet’, reports Der Spiegal. Currently, snippets are assumed to be anything up to 160 characters of content, although this isn’t explicitly defined in the new law.

The vote will come as a big disappointment to German publishers that had lobbied for a much more favorable law, arguing that Google News effectively stole traffic (and consequently, advertising revenues) from their sites as many people are happy to make do with reading snippets, meaning they don’t click through to the publisher’s site. Unfortunately for them, Germany’s lawmakers have sided with Google, voting to make the new law compatible with how Google News currently operates, meaning there’s unlikely to be any change to the status quo. For startups like Flipboard however, they may well be required to rethink how they use content in Germany, or else pay a license fee to display the content they use.

Speaking to Der Spiegal, a spokesperson for Google said that in spite of the ‘victory’, the company was still unhappy with the new law, saying that it would only hurt internet users in Germany. The law is “neither necessary nor useful”, claimed the spokesperson.

Germany’s publishers take an opposing view of course, but the real takeaway from this episode (which is by no means finished, as the law still has to pass Germany’s upper house) is that media organizations are fully aware that the days of printed paper are coming to a close. Content producers in Germany, just like everywhere else in the world, are struggling to come up with monetization strategies for their content in the digital age. As a result, the plan was for Google to subsidize them – but now there’s almost zero chance of this happening, it could well be that smaller news aggregators will need to start looking over their shoulders instead.

Once again, Google comes out as the clear winner, perhaps in more ways than one.

Microsoft Facing $1 Billion Fine

Elsewhere in Europe, it’s not panning out to be such a great day for Microsoft. While Google will be quietly patting itself of the back, its eternal rival is likely to be smarting after receiving news that it could be liable for a fine exceeding $1 billion over unpaid taxes in Denmark.

Softedia reports that the issue relates to Microsoft’s $1.3 billion acquisition of the financial services software developer Navavision back in 2002. Following that deal, Microsoft sold its enterprise resource planning and accounting divisions to a subsidiary based in Ireland, which in turn is owned by other Microsoft interests based in the Caribbean. The net result is that Microsoft effectively shifted Navavision’s accounting overseas, away from Denmark and its high tax rates.

Big tech firms use fancy techniques like this to escape tax bills all the time, but in this case it seems that Microsoft may have broken one or two rules. As a result, Denmark’s national treasury has just announced that it’s ready to slap the company with a 5.8 billion kroner (just over $1 billion) fine for tax evasion, so long as officials can find definitive proof that Microsoft has dodged taxes.


A message from John Furrier, co-founder of SiliconANGLE:

Your vote of support is important to us and it helps us keep the content FREE.

One click below supports our mission to provide free, deep, and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy

THANK YOU