A French commercial court has found Google guilty of abusing the dominant position of its Google Maps application and ordered it to pay a fine and damages to a French mapping company.

"/> A French commercial court has found Google guilty of abusing the dominant position of its Google Maps application and ordered it to pay a fine and damages to a French mapping company.

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Google Maps fined for unfair competition

A French commercial court has found Google guilty of abusing the dominant position of its Google Maps application and ordered it to pay a fine and damages to a French mapping company.

Google Maps fined for unfair competition
Google Maps

In a ruling on Tuesday, the Paris court upheld an unfair competition complaint lodged by Bottin Cartographes against Google France and its parent company Google Inc. for providing free web mapping services to some businesses.

The court ordered Google to pay €500,000 ($660,000) in damages and interest to the plaintiff and a €15,000 fine.

The French company provides the same services for a fee and claimed the Google strategy was aimed at undercutting competitors by temporarily swallowing the full cost until it gains control of the market.

“This is the end of a two-year battle, a decision without precedent,” said the lawyer for Bottin Cartographes, Jean-David Scemmama.

“We proved the illegality of (Google’s) strategy to remove its competitors… the court recognised the unfair and abusive character of the methods used and allocated Bottin Cartographes all it claimed. This is the first time Google has been convicted for its Google Maps application,” he said.

A Google France spokesman said the company would appeal.

“We will appeal this decision. We remain convinced that a free high-quality mapping tool is beneficial for both Internet users and websites. There remains competition in this sector for us, both in France and internationally,” he said.

Google has previously faced other difficulties in France and last March the country’s data privacy regulator imposed a record fine of €100,000 on the company for collecting private information while compiling its Street View service.


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BUSINESS

Google flags higher ad rates in France and Spain after digital tax

Google has told customers that it will raise the rates for advertisements on its French and Spanish platforms by two percent from May to help offset the impact of a digital tax on profits.

Google flags higher ad rates in France and Spain after digital tax

France has collected the levy since 2019, and Spain since this year, under
pressure from voters to make US tech giants pay a greater share of taxes in
countries where they operate.

The ad rate increase is to “cover a part of the cost of conforming to laws
concerning taxes on digital services in France and Spain,” the internet giant
said in an e-mail seen by AFP.

In France, internet companies with more than 750 million euros ($895
million) in worldwide sales, and 25 million in France, must pay a three
percent tax on their French operations, notably advertising sales and
marketplace operations.

Spain also charges a three-percent tax on some of their businesses.

Jean-Luc Chetrit, head of the Union des Marques, an alliance of major
brands, said Google’s decision would “amputate the investment capacity of
brands at a time when all companies are going through an unprecedented crisis.”

Google did not respond to AFP’s requests for comment, but Karan Bhatia, its head of government affairs, warned in February that “Taxes on digital services complicate efforts to reach a balanced agreement that works for all countries.”

“We urge these governments to reconsider what are essentially tariffs, or
at least suspend them while negotiations continue,” he said.

Google as well as Apple, Facebook and Amazon – grouped together as “GAFA” – are in the crosshairs of European governments that accuse them of exploiting common market rules to declare all profits in the bloc in low-tax
jurisdictions such as Ireland or Luxembourg.

Critics say they are depriving national tax authorities of millions of euros even as they profit from a surge in online activities because of home-working and social distancing rules during the Covid-19 crisis.

The companies counter that they are being unfairly targeted by discriminatory levies.

Google logo
Google logo. Photo: Eva HAMBACH / AFP

Global deal?

Amazon had already responded to the French tax last October by raising the rates it charges France-based marketplace sellers by three percent.

Apple followed suit by raising the commission it charges developers who
sell apps on its platform not only in France, but also in Italy and Britain.

The French tax move on global digital companies made it a pioneer in the
struggle to find a fair fiscal system for internet multinationals whose tax
bill is often tiny compared to their income.

Contacted by AFP, Facebook said it had no plans to raise prices for ads in
France or Spain for now as it waited for a global accord on fiscal rules.

The French tax brought in 400 million euros to government coffers in 2019,
and the government applied the levy again last year despite pressure from the Trump administration to drop it.

With President Joe Biden in the White House, the Organization for Economic Cooperation and Development (OECD) – which is overseeing negotiations on a digital tax – has said it hopes a G20 finance ministers’ meeting in July will hammer out an agreement on the issue.

Last month, the new US Treasury Secretary, Janet Yellen, said Washington
would no longer insist on a “safe harbour” clause that would effectively make participation in a global tax scheme optional, removing a key sticking point with EU officials.

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