France Ponders “Google Tax” on Online Advertising

Nicolas Sarkozy (thumb)

In France, a government-commissioned report has put forward the idea of placing a tax on online advertising revenue, and applying the funds to publishers and content creators whose businesses have been adversely impacted by digital media. The levy would apply to any online advertising network operating in France (regardless of whether the company was located there or not) and is generally being referred to as a “Google tax,” in reference to Google’s dominance of the online advertising industry, although it would apply equally to Microsoft, Yahoo, AOL, and a myriad of other companies engaged in online advertising.

The goal of the tax would be to provide revenue to creators and publishers whose businesses have been hurt by the digital revolution and work against advertisers profiting from advertisements running alongside materials—including illegally distributed media—while the authors and publishers receive nothing. The move ties into French president Nicolas Sarkozy’s stated intents to defend France’s cultural heritage in the face of homogenization brought on by digital media; Sarkozy has also called for projects akin to Google Books aimed to preserve and extol French culture.

The survey also suggested taxing ISPs to raise money for developing businesses and other creative sectors that work to preserve and extend France’s unique culture.

Major Internet companies—such as Google—have faced criticism in recent years for profiting off “free” content from overseas publishers by not only copying and redistributing the material, but by running advertisements and other commercial operations alongside it from which the content owners never profit. Google Books, in particular, has drawn legal fire over offering digital versions of French works, and several European newspapers have taken issue with Google News redistributing their content.

It’s not clear how a tax on online advertising would actually benefit creators in France; industry watchers have pointed out that many “content creators” in the digital age have no relationships with media conglomerates or royalty agencies: creating an infrastructure to distribute funds to “amateurs” outside France’s cultural institutions would be a daunting task.