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Google Strikes Back In French Internet Tax Battle

by Ulrika Lomas, Tax-News.com, Brussels

23 October 2012


Internet giant Google has threatened no longer to reference French press websites if the government goes ahead with plans to impose a tax on content on information aggregators.

Google has said that it will remove French newspaper websites from its listings if a so-called ‘Lex Google’ tax is introduced. Based on the German model, the tax aims to ensure that search engines such as Google pay the French media ‘droits voisins’ or ‘related rights’ for the indirect use of their work.

Championed by the French union of national daily newspapers, the move would compel Google to pay the media in France each time an Internet user accesses an article on their website by clicking on a Google link.

Google warns that the provision would serve both to limit access to information and to stifle innovation.

Yet France is not the first country to envisage such plans. Back in 2011, Google temporarily removed the Belgian press from its listings, following similar calls for copyright payment from the country’s media.

The French idea is directly inspired by German legislation, however. At the beginning of September, Germany’s coalition government adopted a bill requiring all search engines to pay its media. The plans have yet to be approved by the German parliament.

Although Google may consider that it is in a safe position, it is currently under attack in France from all sides. France is also considering the idea of imposing a tax on online publicity and a corresponding amendment has been submitted to the country’s 2013 finance bill. Such a tax would strike at the very heart of the Internet giant. Google derives 90% of its income from online advertising.

At this stage nothing is certain, however. The government commissioned a report back in July to examine the issue of digital taxation. The conclusions of the report are expected in December. It seems extremely unlikely that the government will sanction any measures before examining the document.

TAGS: tax | business | commerce | law | intellectual property | copyright | internet | e-commerce | legislation | France | Germany

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