Google has opposed a proposal by the French Government to implement a tax on all forms of online advertising, which would include the company’s PPC display and search advertising.
The proposal was made in the Zelnik report to the French Minister of Culture earlier this month, and advocated that the tax revenue be used to compensate artists and the creative industry. Commonly referred to in the French press as ‘The Google Tax’, it is thought to be specifically aimed at the growing power of the search engine giant and its increasing revenue from online advertising. Despite its popular name however, the ‘Google tax’ would also affect other large internet companies and ISP’s such as AOL, Microsoft and Yahoo.
In principle, the tax aims at addressing what Jacques Toubon, co-author of the report and former Minister of Culture, refers to as “enrichment without end and without consideration”. This is the revenue that internet companies have ostensibly collected thanks to the unauthorised exploitation of intellectual property.
Information Week reports that an email statement from Google has criticised the idea. Reportedly the company believes that ”an additional tax on internet advertising…could slow down innovation”.
“The better way to support content creation is to find new business models that help consumers find great content and rewards artists and publishers for their work” said the Google spokesperson. ”Google already supports content creation through partnerships with many French publishers and content creators. In fact, around the world, we distributed more than 4.2 billion euros last year to our partners, helping to fund great content creation”
Olivier Esper, director of public affairs at Google France, said “there is an opportunity here to pursue innovative solutions, rather than encouraging the idea of an opposition between the internet and cultural industries, which is what this tax proposal does”.
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