Sarkozy's 'New Year's wish': Investigate Google

Not long after a list of pro-copyright proposals stirred controversy, France's president says he supports an investigation of Google as well as a tax on search engines.

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
4 min read

Update: Friday 10:45 a.m. To include comments from Google.

It's doubtful that they would admit it, but U.S. studio chiefs and music moguls must dream that their country will one day elect a president like Nicolas Sarkozy.

Few of the world's leaders are as aggressive in protecting copyright as the president of France, and he proved it again Thursday during a speech to members of the country's creative community when he endorsed some controversial pro-copyright proposals.

Nicholas Sarkozy, president of France has a strong link to the creative community. His wife, Carla Bruni-Sarkozy, is a well-known singer and songwriter. Screenshot by Greg Sandoval/CNET

If Sarkozy has his way, France will tax Google and other search engines, Web portals, and Internet service providers and turn that revenue over to the music and publishing industries, according to reports in multiple French newspapers and news services. Under the plan, the government would also partially subsidize "music cards" that the country's youth could use to buy songs online and France would require the music industry to release song files that "play on all platforms." (It wasn't clear exactly what this meant, but presumably Sarkozy was referring to digital music files stripped of anticopying software).

France's head of state made the statements at the Cite de la Musique in Paris, as part of an annual tradition where the president offers his list of New Year's "wishes" for content creators. Sarkozy said high on his list will be to ask the country's "Competition Authority," which guards against antitrust violations, to investigate Google for possible "abuse of its dominant position" in the online ad market.

On Friday, Google said levying more taxes would threaten innovation and pointed out that competition in France's ad market thrives.

"Online advertising accounts for only a little more than 10 percent of total advertising in France," said Olivier Esper, Google France's policy manager, in a statement. "We are only one player out of many that focuses on online advertising...plenty of competition exists in the advertising world."

In the United States, Google can boast partnerships with many companies from the music, film, and TV industries. On the other hand, it also continues to defend itself against a $1 billion copyright suit filed against it by Viacom, parent company of MTV and Paramount Pictures.

Sarkozy's speech was much anticipated as it followed the publishing of a government-funded report that included a recommendation that France adopt 22 proposals, which have now stirred controversy there, and many other areas in the Western world. The document was authored by three men: an executive from auction house Sotheby's France, a former French mister of culture, and music exec Patrick Zelnick, who the report was named after.

To be sure, Sarkozy has close ties to the entertainment community and none is closer than his wife, Carla Bruni-Sarkozy, a popular singer. Then there's the connection that has raised eyebrows in some quarters of the Internet: Zelnick is the first lady's former record producer. Critics of the proposals have argued that a group led by a music exec is going to come to the conclusions it did. Others point out that the French are very proud of their country's creative achievements and it's important to many there to protect artists.

Whatever the reason that France is inclined to strengthen copyright protections, there's no doubt that the film, TV, music, and publishing sectors are seeing nearly unprecedented cooperation there.

Last month, a Paris court ruled that Google's scanning of French books violates the country's copyright laws. The court ordered Google to pay a French publisher the equivalent of $430,000 in damages and set a fine of more than $14,000 each day that Google continued to display snippets from books.

Nicolas Sarkozy said Thursday that he wants to help getting French youth accustomed to paying for music. Greg Sandoval/CNET

In October, France passed a so-called three-strikes antipiracy law that calls for those accused of illegally downloading content to be warned multiple times to stop. If they refuse they must face a government agency that has the power to shut off their Internet access--once the case is first reviewed by a judge.

Sarkozy and the authors of the Zelnick report say they are trying to give extra support to the music industry, which they say has been badly damaged by online piracy. During Sarkozy's speech, he laid out his "music map for the young," which included the idea for the music card. He told the crowd that he hopes the card to be rolled out sometime this summer and said that it is designed to encourage young people (he did not specify an age range) to acquire music through legal means.

He suggested each card would be worth 50 euros ($71.50 US) and that the government would put up half that money. The rest would be paid by the card owner and music store.

As for the tax on Google and other Internet search engines and portals, Sarkozy said that it isn't fair for Internet advertisers to pay taxes only in the countries where they are based. He said that Google's European headquarters is in Ireland, but the company sees plenty of clicks and money from ads in France, and that people from that country should be compensated.

"Google makes a big investment in France," Google's Esper said. "We make a substantial contribution to local and national taxation. But the fact is that our European headquarters is in Dublin."We comply fully with the tax laws in France and it would be wrong to think of Google's revenues from French advertisers as solely the result of operations carried out locally."

Reader feedback at some of France's top newspapers was overwhelmingly critical of Zelnick's report.

One reader named Philippe called the plan "Kafka-esque" and someone named Aline Maginot said that if she were Google, she would leave the country, shut down Google.fr, and "force the French to access Google in English."

This story was compiled from reports published by Reuters, AFP, Le Monde, Le Figaro and Liberation. Translation provided by CNET employee Virginie Lemay-Alarcon.