France looks at imposing a 'Google tax'

Posted by Emma Heald on January 7, 2010 at 11:41 AM

A French investigation into "creation and the internet" has proposed a "Google tax" on online advertising revenues, it was widely reported in the French press. Culture minister Frédéric Mitterrand launched the 'mission Zelnik' in September, comprising Patrick Zelnik, CEO of independent music label Naïve, Jacques Toubon, former minister of culture and Guillaume Cerutti, CEO of Sotheby's France.

The proposals made to support content creation will require about 50 million euros of financing in 2010, then 35 to 40 million a year in 2011 and 2012, and this is where the Google tax, as coined by Toubon, would come in. The recommendation to tax Google and other internet giants such as "Microsoft, AOL, Yahoo or Facebook" reflects complaints from online news outlets and cultural sites that these companies make much of their advertising revenue from using content without the owners' permission, according to AFP.

The Zelnik report also asked the government to ask the competition authorities to look into competition in the online advertising sector.

Other recommendations included expanding paid video on demand services, state contributions to getting young people to legally download music, increased taxes for Internet providers and investment in digitalisation of books. The report was intended to complement the Hadopi law, which tackles online piracy. French President Nicolas Sarkozy will give his views on the recommendations today. The French government takes an active role in supporting the press, having spent €1.2 billion in 2008 on schemes such as free newspapers for young people. The government is also a major shareholder in news agency Agence France-Presse.

Newspaper publishers might see the idea of Google being taxed as fair, but would higher taxes for Google and others for whom online advertising is a major part of their revenue actually make a difference to newspapers in the copyright debate?

Source: Le Monde, Agence France-Presse, Liberation (print)