Germany's "Google tax"

[Syt]

http://www.buzzmachine.com/2013/03/02/roll-over-gutenberg/

Roll over, Gutenberg

Germany, I fear, is not the land of innovation. It is a land of institutions.

This week the German Bundestag passed a law created by publishers — primarily Axel Springer and Burda — to force internet companies — read: Google — to pay for quoting — and thus promoting and linking to — their content. The legislation, the Leistungsschutzrecht, was known as the Google tax.

In the end, compromise legislation exempts precisely what the publishers had been going after: snippets of text of the sort that search engines quote. The bill now generously says that single words or very few words — it is not precise in its definition — remain free. But of course that exception only proves the absurdity of the effort: Who could ever own a word or a phrase? Or a thought?

So now, if the bill passes the next house of the legislature, lawyers will make a fortune debating how short is too long. No matter the length, speech suffers. Don't the publishers see that they live by the quote? Their content is made up of what other people say. Their content gains influence when other people quote it.

But that is beside their point. They want to tax Google. They say it is not fair — imagine a kindergartener stomping his little feet — that Google makes money as they lose money. They think they deserve a share, though the truth is that their content makes up very little of what people search for. And, besides, every time Google links to them it is up to the publishers to establish a relationship with that user and find value in it. That publishers have failed to do this almost two decades into the web era is not Google's fault; it is their fault. Rather than innovating and finding the necessary opportunity in their disruption, these publishers — conservatives who otherwise would diminish government — go running to the Chancellor and her party to pass their Leistungsschutzrecht.

To be fair, this is not purely a German disease. It is a European ailment as well. In France publishers hide behind government's skirt to blackmail Google into paying into a fund to support innovation by publishers who've not innovated. The French government is also looking at taxing the gathering of big data — a tax, then, on knowledge. Belgian publishers rejected Google's links and then thought better of it and finally extorted Google into advertising in their publications to avoid that nation's version of a Leistungsschutzrecht. The internet causes a certain insanity the world around. In the U.S., we had SOPA and PIPA, laws like the Leistungsschutzrecht meant to protect ailing industries — though they were defeated. Then there is ACTA, an international attempt to protect the copyright industry.

But there are more issues in Germany. It is leading the privacy technopanic in Europe. Government leaders have urged citizens to have pictures taken from public places of public views of the facades of buildings blurred in Google Street View; they label this their Verpixelungsrecht. A privacy extremist in one state in Germany has tried to outlaw Facebook's "like" button. That same state tried to overrule Facebook's requirement to use real names.

And another: In entrepreneurial circles, Germany is known as the land of internet copycats. Again and again, German entrepreneurs have copied American services and business models, though their real business model is to get bought by the American originals.

Mind you, I love Germany (though to many Americans, that seems like an odd statement). There's nowhere I'd rather visit. I have many friends there. I have met many talented technologists there. I marvel at its book culture and at its lively — if also suffering — market for serious journalism.

But today I worry about Germany. It is an industrial wonder in a postindustrial age. Government and media are embracing each other to defend their old institutions against disruption and the opportunity that can come with it. As I wrote in my book Public Parts, I'm concerned that Germans' will to be private, not to fail, and especially not to fail publicly put them at a disadvantage in an entrepreneurial age when failure is a necessary product of experimentation. I fear that entrepreneurs, investors, and internet companies will shy away from Germany's borders given the hostility that is shown especially to American internet companies.

I am disappointed that the land of Gutenberg, the land that invented the ability to share knowledge and ideas at a mass scale and to empower speech is now haggling over the control and ownership of a few words. As they say in German, schade. What a shame.

In short: German online media complained that Google News/search quotes the first paragraph of news stories. So Google has to pay. Never mind that you can use tags to be exempt from Google searches, if you want to. The media (with a few exceptions) ran a strong campaign in favor (the first legislative drafts would have caught bloggers and news aggregators alike), ignoring all naysayers (of which there were plenty), and - mostly - got their will.

It's not the first time, either. A few years ago they pushed for a law that state TV/radio websites must remove their online media after 7 days, because it was unfair competition for the commercial media.

Are Germans luddites? To some extent, yes. One reason why it took me so long to get onto Facebook was because a lot of the people I know in Germany or Austria (easily more than 50%) refuse to use it, so there was little incentive.

[Neil]

Meh.  That's the sort of thing that big companies do if they think they can get away with it, especially when they're feeling pressured by obsolete business models.

[Syt]

I agree, but the problem with the media is: what politician dares go against their combined front?

[Tamas]

one more proof that bureaucracy is not only the tool of stagnation and decline, but also of big companies to preserve the status quo and fight against a free market.

[Martinus]

How on earth can you place this one at the feet of "bureaucracy"?

It's the work of lobbyists paid by unchecked media corporations.

[Syt]

Yeah, not quite sure how this is specifically bureaucracy related.

Something to add: the fee will benefit the publishing houses only. There's no mechanism for the journalists to get a share.

[Neil]

Maybe bureaucrats will be enforcing the corrupt law?  That bureaucracy is a tool that is being misused?

All lawyers must die.

[Martinus]

Also, I don't think this is about Germans being luddites - I know that in Poland big "original content" news corporations are pushing for laws like this, as well, so far unsuccessfully. I just think this means that in Germany every politician is scared shitless of Bildt.

[Martinus]

Yeah, not quite sure how this is specifically bureaucracy related.

Something to add: the fee will benefit the publishing houses only. There's no mechanism for the journalists to get a share.

Yup. If anything, this law is an example how free market can lead to very un-free outcomes - if you allow some companies to be too big, they can trample over every one else.

[Tamas]

Yeah, not quite sure how this is specifically bureaucracy related.

Something to add: the fee will benefit the publishing houses only. There's no mechanism for the journalists to get a share.

Yup. If anything, this law is an example how free market can lead to very un-free outcomes - if you allow some companies to be too big, they can trample over every one else.

HELLLOOOO?!!!!!

free market? Where the GOVERNMENT FORCES one company to pay tribute to an other one? give me a break.

[Syt]

The market has led to a small handful of publishers that rule the market and can exert huge pressure on politicians that are, indeed, scared shitless of them. German political debate these days doesn't occur in parliament but in political talk shows and through media campaigns.

[Tamas]

The market has led to a small handful of publishers that rule the market and can exert huge pressure on politicians that are, indeed, scared shitless of them. German political debate these days doesn't occur in parliament but in political talk shows and through media campaigns.

In a free market the government would not have the right to interfere in the market. Hence the term "free".

And in a free market, these traditional companies would be in decline and/or hard pressed to adopt to new technologies. They are not (yet) because they have government enforcement and tax money working for them.

[Syt]

Every law a government makes interferes in the market in some way. You're asking for pure anarchy, then?

Also, IMO markets tend towards power agglomeration (competitors tend to try and dominate the market in their geographical and/or business area). If such a situation (or monopoly) is reached the market can become dysfunctional and requires outside regulation.

[Martinus]

It's amazing how ignorant Tamas is of economy 101.

[Eddie Teach]

A free market's about as realistic as a free lunch.