France wants to tax search engines and ISPs for online advertising

By EDRi · January 13, 2010

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Deutsch: [Frankreich möchte Suchmaschinen und ISPs Steuern für Onlinewerbung auferlegen |]

A report commissioned by the French culture ministry issued on 6 January
2010 proposes a tax on online advertising in order to support the production
of music, films and journalism in the digital age.

France is not at the first attempt to tax online advertising. In 2009, after
banning advertising on public TV channels, the government proposed a tax on
ISPs, mobile operators and commercial TV broadcasters to help fund public

The new document, called the Zelnik report (after the its author’s name),
includes 22 measures intended to improve the sale of online content. Among
these measures, the report proposes the introduction of a so-called “Google
tax” of 1% to 2% applied on the revenues obtained by search engines and
portals from online advertising. The search engines would be taxed every
time an ad or sponsored link is clicked in France, irrespective of the
origin of that advertisement, and the ISPs would be taxed based on their

Another proposal of the report is the introduction of a music voucher system
for young people between 15 and 24 with cards allowing them to buy tracks
and albums at a 50% discount, covered 20% by the government and 30% by the
record companies. Similar systems could be developed for films by means of
subsidised subscriptions for videos and digital books as well.

According to another recommendation of the Zelnik report, a licence should
be bought by music and video streaming sites such as YouTube and Daily
Motion in order to allow unlimited access to their content.

While the entertainment industry welcomed the document, Google France has
tried to underline that the cultural producers should make efforts to
develop new business models that might be more efficient than depending on
taxation for support.

“There is an opportunity here to promote innovative solutions, rather than
extending the attitude of opposition between the internet world and the
cultural world, for example through the approach of taxation,” said Google
France spokesman Olivier Esper.

The report is now under consideration by the Culture Ministry.

Google and “music card”, Sarkozy validates most of the propositions of
mission (only in French, 7.01.2010)

France considers tax on search engines (8.01.2010)

Sacre Bleu! France Mulls Tax On Web Ads To Bail Out Old Media (7.01.2010)