France considers tax for Google, Yahoo and Facebook

French president Nicolas Sarkozy has adopted a hard line on regulating digital content.

Google and other net firms could be taxed under plans being considered by the French government.
A report, commissioned by the government, suggests firms such as Google, Yahoo and Facebook should pay a new tax on their online ad revenues.The money could be used to fund legal alternatives for buying books, films and music on the internet.

But critics say the tax would be difficult to implement and Google says it could slow down innovation.President Nicolas Sarkozy has taken a tough line on the increasing dominance of digital content.

France has just introduced tough new legislation aimed at removing those who persistently download illegal content from the net.It has also gone head-to-head with Google over its plans to digitise the world’s books, with a project to set up its own digital library financed by the government to the tune of £700m. And it is considering a law which would give net users the option to have old data about themselves deleted.

The proposals for a tax on content is still very much in the early stages and there are few details of how it would exactly work. Patrick Zelnik, who contributed to the report and is also the founder of the French president’s wife’s record label, hopes the idea will be taken on board across the EU.

But Google is among those to have voiced opposition to the plan. “We don’t think introducing an additional tax on internet advertising is the right way forward as it could slow down innovation,” said Olivier Esper, senior policy manager for Google France.

The better way to support content creation is to find new business models that help consumers find great content and rewards artists and publishers for their work.”

Source: BBC News “France considers tax for Google, Yahoo and Facebook” January 8, 2010.

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