Google News does not run advertisements on news.google.com. Thus Google does not have any profit to share with the newspaper publishing industry in the first place. If anything, media sites should pay Google for getting traffic and being featured in results. Google News sends over 4 billion page views every year to all Google News partners put together.
The headline and that very small extract of the news story, what appears as a Google search result description, are copyright materials. This is why at first the reason behind the law was fair enough.
The use of snippets from the actual posted news stories is not excessive. German lawmakers decided in a parliamentary vote today that the newly proposed law will not pass. And if you’re asking if anyone has anything to loose from this decision then don’t even bother. The German Parliament made everyone a favor: the newspaper publishers will continue to make money and gain new readers from all that free Google News traffic.