COMMENT & ANALYSIS
Germany proposes a Drudge Tax Government seeks to impose fees on news aggregators
European politicians are on the hunt for new sources of revenue as the continent’s fiscal situation worsens. The level of desperation is clear in the latest move from German Chancellor Angela Merkel’s coalition government to tap into the cash reserves of Internet search engine giant Google to bolster that country’s ailing publishing industry.
The second item on the coalition’s list of priorities released last week was a proposal to slap online news aggregators with a tax. “Online commercial vendors, such as search engines and news aggregators, should in the future pay a fee to publishers for the distribution of press products (such as news articles) on the Internet,” the document explains. Any business that links to a news article with a brief excerpt is subject to the scheme.
This action has far more to do with protectionism than protecting intellectual property rights. Websites such as the indispensable Drudge Report, Times 24/7, Real Clear Politics, Digg, Fark and Reddit collect news from sources spread across the Web. These sites are wildly popular because they draw the important stories together in one convenient place, fulfilling a very specific need among a news-hungry public.
Far from leeching off newspapers and print journalists, aggregators are essential to spreading the word about important stories. They drive significant traffic, which in turn generates revenue for content providers. It’s a win for both sides. For publishers that disagree, Google already includes a simple mechanism for websites to exclude themselves from search results. If the purported theft of content were truly the issue, that would end the discussion.
That it doesn’t shows this tax is not a matter of principle, but of old-fashioned crony capitalism. The new economy will be used to bail out the old economy simply because the new economy’s lobbyists aren’t as well-connected.
Europe isn’t alone in this failing. Two years ago, the Federal Trade Commission began work on a project to “reinvent journalism” which would have taxed news aggregators. Fortunately, the trial balloon was quickly shot down.
The Old World has let the balloons fly, harassing Google on more than just copyright issues. A European Union antitrust inquiry is expected to wrap up in the next few weeks. The eurocrats think the company may have broken laws by daring to offer a search engine service so good that few consumers see the need to use Microsoft’s Bing alternative search offering.
When Google rolled out its “Street View” map service in 2007, the governments in Austria, France, Greece, Italy and Switzerland pounced, accusing the company of violating privacy laws by photographing public streets. Never mind that these same governments are more than happy to use speed cameras to photograph every passing car, so long as it means raking in millions in revenue.
Europe needs to stop punishing innovation and the entrepreneurial spirit, at least if it ever wants to see the economy recover. Bureaucracies are illequipped to pick winners and losers in the marketplace. The Internet is doing just fine without governmental meddling. It ought to be left alone.