Google has lost a case brought by Belgian newspapers, potentially forcing it to exclude the newspapers' material from Google News, at least in Belgium. John Battelle and Danny Sullivan have good analyses, both of which question the momentous impact that some articles suggest the case could make.
It's easy to see why there's wide disagreement over the issue of how much Google can and should index and display. One insightful commenter on TechDirt provided the free-market view: Google News essentially is doing the equivalent of taking a snapshot of a car parked on a public street. In other words, don't park the car on the street (and the Internet is nothing if not public) if you don't want anyone to take pictures of it.
But publishers such as Tim O'Reilly, usually a firm backer of Internet openness, understandably don't agree with this kind of analogy, in part because Google often provides more than a snapshot. By caching stories, it often provides the whole story, and often for months or years after the publisher has started charging for archives.
Given the reality that publishers can opt out of getting indexed by search engines, it seems pretty obvious all this is a negotiating tactic--one that likely will result in Google paying some kind of licensing fees in return for displaying the content. Because as the headline of Good Morning Silicon Valley's post illustrates--Belgian newspapers score victory in bold traffic-reduction initiative--publishers need Google at least as much as Google needs them.