France may start taxing Internet advertising revenues from online giants such as Google, using the funds to support creative industries that have been hit by the digital revolution, reports Liberation.
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 proposal put forward is the country’s latest challenge to the virtual free-for-all for internet content. The country has previously caused controversy with some of the world’s harshest laws on online piracy.
The levy, which would also apply to other operators such as MSN and Yahoo, would put an end to “enrichment without any limit or compensation,” newspaper Liberation quoted Guillaume Cerutti, one of the authors of the report, as saying.
It would apply even if the operator had its offices outside France, as long as the Internet users who click on ad banners or sponsored links are here, the paper said.
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.
The question is, will any of these proposals realistically help save offline newspapers?
If one of the businesses is located in France I can understand the taxation of that transaction, but if none of the entities exchanging money is located in their country, how can they tax that transaction? That’s like China taxing bookies in Vegas who bet on Chinese basketball.
Instead of trying to keep alive newspapers, why don’t they instead try to find ways to get more people to read online newspapers. They’re heading in the wrong direction. We should be moving forward, not backwards. There are very few times when I’d rather read something on paper than on screen and usually that’s when I’m reading a textbook for a course.
As far as this nutjob taxing these advertising clicks, I think he’s going on the basis that he thinks these businesses are ‘doing business’ in France. He’s looking at from the perspective of the ad being on the user’s screen, which in his mind makes it ‘in France.’ In reality, the content is all on servers which are most likely not in France. Since no good or service is being delivered to the French person who clicks the ad (by the click itself that is) then I don’t see what there is to tax.