France could tax Google to subsidize music

A government report says Google and other online-ad companies are "profiting without any consideration" for music artists and book publishers. What comes next?

Greg Sandoval Former Staff writer
Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
Greg Sandoval
3 min read

A report financed by the French government recommends that Google, MSN, Yahoo, and other big advertising companies--as well as Internet service providers--be taxed, with the revenue set to help fund the music and publishing sectors.

Google is "profiting without any consideration" for music artists and book publishers, according to the report, written by Jacque Toubon, France's former minister of culture, Patrick Zelnick, a former music executive who produced French First Lady Carla Bruni-Sarkozy's songs, and Guillaume Cerutti, an executive at Sotheby's France.

There is nothing that requires the French government to adopt any of the report's proposals. But the ideas in the report are important in that they reflect France's apparent distrust of Google's impact on the creative community. The government of French President Nicolas Sarkozy has promised to defend French culture and has helped implement some of the world's strongest antipiracy and pro-copyright laws.

A spokesman for Google France told French media that instead of calling for taxes, the creative community should look to solve any problems through mutual cooperation.

According to a story in the French newspaper Le Monde, Sarkozy will have the last word on whether to push the 22 proposals presented in the report through the legislative process. Sarkozy is expected to discuss some of the report's ideas when he addresses a gathering of media and cultural leaders on Thursday.

The authors of the report claim that by taxing Google, Facebook, and the other ad companies, it could raise up to the equivalent of $28 million.

The Zelnick Report says the tax would kick in anytime an online ad or sponsored link is clicked in France. One of the most controversial items in the report is that it calls for a company to be taxed regardless of where it is based.

Le Monde noted that trying to tax companies based outside of France would create all kinds of legal and technical issues. The authors claimed that these could be overcome and that there is no legal issue.

"We're not going to wait for the European Union to go along with this Google tax," Zelnick told the left-leaning publication Liberation. "This [tax] is legally and technically feasible to implement without waiting for the agreement of our European partners."

The report is very focused on protecting the music industry's content on the Internet, and Zelnick explained why. "The music industry is in the worst situation--worse than the publishing industry," he told Liberation. "They are in great danger. So we must act quickly."

Click on photo to see story on Sarkozy's endorsement of Google tax and his support for a government inquiry of the search engine.

The report also throws a lot of the blame for the troubles of the creative community on Google, arguing that the search giant profits from the work produced by content creators and doesn't give anything back. The authors also warned that the French government should keep an eye on whether Google is abusing its dominance over the online-ad industry.

In one unusual proposal, the Zelnick Report recommends that the French create music cards partially subsidized by the government that could be used by citizens to buy online music.

Correction, 9:57 a.m. PT: An earlier version of this story incorrectly stated the amount of money the authors of the report estimated they could raise by taxing Google and other advertising companies. The correct figure is the equivalent of $28 million.

Translation provided by CNET employee Virginie Lemay-Alarcon.