It is not the first time this has happened. I can't find a link right now (somebody care to add one?), but a few years ago one of the big news outlets managed to secure a legal ruling that they had some rights over how people linked to their site, and demanded that Google comply with their demands or remove all links to their site.

Google removed all links to their site.

After a few days of receiving no search traffic whatsoever, the company who instigated this surrendered unconditionally and asked Google to put things back how they were originally.

The moral of this story is that Google provides a free service that is of immense value to the people at the other end of the link, and demanding that Google pay you for providing this service is both unreasonable and unwise.

Unfortunately, when the government steps in (as they have in Europe multiple times), it ends up not being "unwise" at all for the instigators. Something similar happened with French newspapers:

"Pay us for indexing our sites!"

"We don't want to engage in that transaction on those terms; if you wish, we will stop indexing your sites"

Then the French gov't steps in and effectively legislates that Google is legally obligated to engage in a transaction on the terms of the other party (and pulling out of the transaction is not an option). As I recall, the end result of this extortion was Google paying ~$70 million in what was effectively a protection racket (where the nominal purpose was to set up a fund to help French newspapers enter the digital age).

That was a voluntary settlement - details are here: http://www.theguardian.com/technology/2013/feb/01/google-52m...

The bottom line is that Google would rather do business than not, and £52m is not a painful expense for them here. I'm pretty sure that no European court could rule a company was obliged to engage in a transaction against its will, and would be unable to enforce this. Google have shown with China that they are willing to drop a nation if the terms offered are too onerous. They're not a public utility.

If France would never enforce the transaction, then why would Google pay $70m (and why would France say they would enforce the transaction in the first place)? Obviously it was technically voluntary, but if someone does something voluntarily under threat of bogus legal action, I'm really not seeing the difference from a protection racket.

You'd have to look at the settlement details to find out, but I believe the answer is that the settlement involves a lot of things Google wanted, like high-value adwords placement, and they expect to make a lot more money from that.

If that were the only consequence, this wouldn't be so problematic. But it makes linking to anything something you have to pay for with the author having no way to opt out. So any time you post a link you have to pay a fee, which is collected by a government agency.