Companies that leverage the Internet to advertise to citizens should help support industries that are suffering thanks to the Internet, according to some in France. The French government is considering a tax on companies that advertise online as a way to prop up creative industries that are having trouble keeping up with the digital world, such as musicians and publishers. Unsurprisingly, the proposal has drawn criticism from those who believe governments should not be in the business of punishing Internet success and instead embrace the new things it has to offer.
The report was commissioned by France’s culture ministry and written by record producer Patrick Zelnik. In it, Zelnik argued that big companies like Google, Yahoo, Facebook, AOL, and Microsoft should together be taxed up to �20 million per year (about US$29 million), even if their offices were not based in France. This, he said, was in order to end “the endless enrichment without payback”—essentially, these companies shouldn’t be able to make a buck off the clicks of French citizens without giving back to the French creative community.
This was only part of the 69-page proposal, however; other parts of the report discussed offering a public subsidy for citizens to buy music online, the creation of a licensing entity to ensure artists get paid for online music sales, and increased spending on the digitization of books. It also suggested taxing ISPs based on traffic—that plus the “Google Tax” would add up to a total of �50 million (or about US$72 million) in the first year.
Google, of course, did not quite agree with the reasoning behind the proposed tax. Google France’s Director of Public Affairs Oliver Esper told Ars that the company submitted a response to the report that emphasized the importance of Internet companies and cultural industries working together instead of in opposition. “We hope that, among the recommendations contained in this report, the ones encouraging cooperation will be taken forward, such as proposals to simplify and adapt licensing mechanisms to the digital environment,” Esper said. “There is the opportunity here to pursue innovative solutions, rather than encouraging a sense of opposition between the Internet and cultural industries, as the tax proposal does.”
French think tank Renaissance Num�rique had a much stronger reaction to the proposal, saying on its website that it was appalled by the “blatant disregard of the Internet and communication technologies.” The firm questioned why Internet advertisers are responsible for artists’ lost income, and strongly urged the government to take a more entrepreneurial approach to the Internet. “Let’s stop demonizing the Internet and look at the benefits of the web!” said Renaissance Num�rique co-president Christine Balagu� in a statement.
France’s government has not traditionally been known for being “Internet friendly”—it has long been under fire for its three-strikes laws that keep getting passed into legislature (but have yet to be enacted). And, this is not the first time France has tried to tax ISPs in order to fund public media. The “Google Tax” still has a ways to go before it becomes a law in France, but we wouldn’t be surprised to see the proposal gather momentum in the coming months.