France plans ‘Google tax’ on internet searches
France is planning a “Google tax” on internet search websites to raise money to plough into creative industries weakened by the digital revolution.
(TELEGRAPH) The proposal, outlined in a government-commissioned survey, has set the scene for a new Gallic run-in with Google – fast becoming the global internet behemoth the world loves to hate.
The levy on advertising revenue is the latest plank in France’s drive to regulate the internet, which has seen it enact some of the world’s toughest antipiracy legislation.
Besides Google, the tax would target other large operators in Europe such as Microsoft and Yahoo! whether or not their offices are in France. Google’s European headquarters are in Ireland, but under the proposal, the operator would pay a levy every time a French internet user clicks on an advertising banner or sponsored link on its sites.
Guillaume Cerutti, one of the authors of the report said the tax would put an end to “enrichment without any limit or compensation”.
Google – which this week extended its empire with the launch of Nexus One, its first mobile phone – has annual internet advertising revenues in France alone of £720 million, according to the report’s authors. They want France’s competition watchdog to investigate whether it is respecting monopoly rules on internet advertising.
President Nicolas Sarkozy has repeatedly cast himself as a defender of France’s cultural heritage from digital predators. Last month, he pledged £700 million to digitise France’s national literary treasures and stop them falling into Google’s hands. “We are not going to be stripped of our heritage for the benefit of a big company, no matter how friendly, big or American it is,” he said.
Google France’s general director, Olivier Esper, called on the government to “favour co-operation” rather than “a logic of opposition between the worlds of internet and culture, for example, via the logic of taxation”.
The president is said to have been made keenly aware of the problems illegal downloads pose musicians by his supermodel-turned-singer wife, Carla Bruni-Sarkozy.
This may explain why the French first lady’s producer, Patrick Zelnik, was tasked with leading the commission, which came up with the proposals. One of these suggests taxing internet service providers to raise tens of millions of pounds for developing the online music business and other creative sectors.
The funds would go towards financing schemes such as a government-subsidised digital subscription for 15 to 24-year-olds to download music cheaply to wean them off illegal piracy.
Mr Zelnick said he hoped to get Europe-wide support for the proposals but that it was “legally and technically” possible for France to go it alone.
However the “Google tax” drew vitriolic criticism from web professionals.
Numérama, an internet news website, said: “As France and Europe are incapable of fostering the emergence of big internet players, why not tax American success stories to fund their ageing industries.”
Chris Anderson, director of Wired, the American internet magazine, said the system would be “absolutely impossible to put in place due to the global nature of the internet”.
There has been growing pressure in recent months for operators and users to pay for content from online newspapers, films and books. Under France’s new internet piracy law, which took effect this month, repeat illegal downloaders will be disconnected and fined.