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Google, Facebook, Amazon may be subject to French taxes

The European government proposes levying a tax on Internet-based tech companies that make mass amounts of revenue with online advertising.

With the Internet being a relatively new concept, governments are still working out how to manage, secure, and legalize the Web. The French government, in particular, has been studying how U.S. companies -- such as Facebook, Google, and Amazon -- are making lots of money from its residents but are paying very little in local taxes.

As a response, French President Francois Hollande has commissioned a report that looks at a new idea: taxing the Internet.

According to the New York Times, the report, which was released on Friday, details a tax that would be levied against Internet-based tech companies that collect people's data. These companies mostly gather user data on the Internet for targeted advertising. The proposed tax rates would be based on the number of users each tech company tracks.

Google makes more than $30 billion per year in advertising revenue, according to the New York Times. Two billion of this is earned in France. Since Google isn't a French company, it doesn't have to pay taxes on all of this income.

France's battle against Internet companies is nothing new. In October, the government proposed a law that would require search engines to pay for news articles if they wanted to include them in query results. And in the past, former French president Nicolas Sarkozy discussed taxing Web advertising.

Google told the New York Times that it was reviewing the report and that "The Internet offers huge opportunities for economic growth and employment in Europe, and we believe public policies should encourage that growth."

The proposed law still needs government legislation to pass. According to the New York Times, this could happen by the end of the year.

CNET contacted Google for comment. We'll update the story when we get more information.