To help struggling newspapers to generate new revenue from online operations, the German government intends to require search engines and other Internet companies to pay publishers whose content they highlight.

German publishers are delighted by this initiative, however the announcement set off howls of protest from Internet companies and bloggers, who said the proposal could threaten free speech and stunt the development of the digital economy in Germany.

“I fear that such a regulation would slow down the development of the Internet because it creates additional costs and leads to inefficiencies,” Eric E. Schmidt, executive chairman of Google, told the news agency DPA during a visit to the CeBIT technology fair in Hanover, Germany, last week. “The Internet is an important component of Germany’s economic success. That’s why one has to be careful with such changes.”

Mr. Schmidt did not give specific examples, but analysts have suggested that some news aggregators might simply shut down their operations in Germany, rather than pay the fees.

Source:  New York Times