Google warns its news site could shut down in Europe if a new 'link tax' goes ahead

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The future of Google News in Europe could be uncertain if European Union plans for a "link tax" for using news stories go ahead.

The so-called link tax is part of proposed European legislation that grants publishers copyright over content that is shared online via Facebook or YouTube and applies to sites that aggregate articles such as Google News. If the legislation goes ahead, Google would have to compensate publishers when articles appear in search results on its news pages.

But Google's Vice President of News Richard Gingras told the Guardian that the company is very concerned about the possible payment rule and would not rule out shutting down Google News in EU countries if the legislation goes ahead in its current form.

In Spain, Google closed its news service in 2014 because of a similar requirement for it to pay royalties to Spanish publishers. "We would not like to see that happen in Europe," Gingras told the Guardian. "Right now, what we want to do is work with stakeholders." However, as Spain is a much smaller jurisdiction than the EU as a whole, there are doubts about whether Google would take such action.

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Article 11 of the legislation, part of the EU Copyright Directive, means that publishers — such as news sites that are currently losing advertising dollars to online platforms — could effectively charge Google News and others for their content. On the flipside, publishers rely on Google to provide traffic to their websites.

Article 13 of the proposed law would require sites such as YouTube to buy licenses for content such as music videos. Members of the European Parliament (MEPs) backed the proposals in September but Google is lobbying against it.

Gingras told the Guardian that it won't make a decision on the future of Google News until it sees the final language of the legislation and added that its news site does not generate revenue for the company.

It is thought that Axel Voss, the MEP overseeing the legislation, is continuing discussions before talks take place with individual EU member states.

A spokesperson for Google was not immediately available for comment when contacted by CNBC.