Sarkozy proposes ad tax on Google

The French government is considering levying a tax on the advertising revenues of Google and other internet portals, in the latest sign of a European backlash against the activities of the US internet search group.

President Nicolas Sarkozy instructed his finance ministry to examine the merits of a tax in response to complaints from the French media that Google and other sites are generating advertising income using their news and other content. He also called for an inquiry by French competition authorities into a possible “abuse of dominant position” in the advertising business of big internet sites.

Mr Sarkozy commented after the publication of an independent report for the French culture ministry that proposed a tax on Google, Yahoo, Facebook and other sites, to help fund initiatives for writers, musicians and publishers to make money from the web.

The report recommended issuing music cards to young people with €25 ($36) in credit provided by the government as a way of encouraging legal downloading of cultural works.

Google said that it opposed any such tax. “We don’t think introducing an additional tax on internet advertising is the right way forward as it could slow down innovation,” said Olivier Esper, senior policy manager of Google France.

Amid growing global scrutiny, the French government, in particular, has gone after Google on a number of fronts.

Mr Sarkozy said last year that France would earmark €750m from a national investment scheme for the digitisation of French culture, including books, in what could turn out to be state-funded rival book scanning project to Google’s book programme.

Last month a Paris court ruled that Google had violated the copyright of authors and publishers by scanning French books held in US libraries without consent. The court ordered the group to stop scanning titles published by La Matinière, the company that brought the case, without prior authorisation, and instructed it to pay €300,000 in damages and interest.

Google said it would appeal, but similar concerns were being raised in other countries. A Chinese court heard a similar case brought by a Chinese author last month.

And in August the National Library of France triggered a furore among the literary establishment – and a government review – when it revealed that it was opening negotiations with Google about a contract to digitise part of its collection, rather than using an under-resourced French public sector alternative.

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