Sure, but I don't see how is that not cooperating. Not cooperating would be to close the offices in the country and continue running the site without paying, in defiance to the law. But what Google did was adapt itself to be in compliance with Spanish law, by taking one of the two options available.

Yes, the problem here of course is that 'the people on the street' don't know about this crazy stuff in their country, so something more drastic needs to happen than shutting down Google News if you want 'the people' to speak up. Trying to block Google because they refuse to comply would be a good one for that.