In Crony Capitalist Move, Germany Threatens to Tax News Aggregation

New aggregators have been singled out in Germany as a market worth taxing. The idea it seems is that these companies are benefiting based on the hard work of old media or newspapers. The challenge is aggregators will gladly allow publishers to opt-out of being highlighted but by doing so companies get less web traffic which actually can damage them.

To many this is an example of crony capitalism – or having a company (or group of companies) in a potentially slowing market use its power to have the government “level the playing field.”

A tax is a penalty or fine – and discourages a certain behavior. When you are late to the library with a book you pay a fine. When you break the law you quite often pay a fine. And now when you aggregate news in Germany or perhaps display aggregated news in the country you could be subject to a fine/tax.

And it is exactly these sorts of illogical moves to tax one industry but not another – penalize this behavior but not that, which slows innovation and business growth. And in a global economy which is competitive, these sorts of moves make countries less successful and as a result these sorts of arbitrary fines have an inverse relationship to local economic growth an hiring.

Imagine if there was a strong blacksmith/horse shoe lobby when Henry Ford decided to mass produce cars. They would have screamed to politicians that the automobile would kill the jobs of blacksmiths and as a result, the automobile market should be taxed into submission.

Imagine the damage which could have been done to the US automobile market if it lost its early lead in the market.

Simply stated – when free market forces are altered, we worsen outcomes. Perhaps the only exception is breaking up a monopoly but even there one could argue the free market should be left alone.

The challenge is that when the time comes to blame someone for deteriorating economic conditions, the odds are the bankers, the 1% and large corporations will get the heat – before this happens however, shouldn’t the general media be highlighting the perils of crony capitalism? Not just in Germany and Europe but worldwide?

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