According to a report commissioned by French President François Hollande, Google, Facebook and other US-based Internet giants should be taxed on the extensive amount of data they collect from users.
The report, NY Times details, classifies personal data “as the ‘raw material’ of the digital economy.” It finds that a “tax on data collection was justified on grounds that users of services like Google and Facebook are, in effect, working for these companies without pay by providing the personal information that lets them sell advertising.”
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The proposal is one of many attempts to grow tax revenue from US-based Internet companies, which operate in France but pay very little taxes. Introducing such a tax would bring in fresh, previously untapped revenue to the country — so long as tech companies cooperated.
But what are the implications of such a proposal? First and foremost, it classifies users which share their data with social networks — often unknowingly, in the case of IP addresses, GPS data, etc — as unpaid employees. That concept leads to countless additional issues, but is an interesting take on a classic saying: “if you’re not paying for it, you’re the product.”
President Hollande’s report also calls for user data to be recognized for its value, calling it the “raw material” of the digital economy. While equating data to iron ore may be a stretch, it’s worth remembering data is the fuel behind Facebook’s billions.
Should Google pay up for mining French citizen’s data? For France, the idea may not be terrible, but a new levy could also harm the growth of data-fueled tech companies.
Data now operates like a currency, giving users access to services from Facebook and Google for free. Taxing that data could threaten the success of such a model, if these French policies become law and are embraced across Europe.
Image credit: Getty Images/AFP/Stringer