France on Tuesday demanded that internet giant Google postpone rolling out its new privacy policy two days before it comes into effect as it appears to break European Union data protection rules.

"/> France on Tuesday demanded that internet giant Google postpone rolling out its new privacy policy two days before it comes into effect as it appears to break European Union data protection rules.

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France raps Google’s new privacy policy

France on Tuesday demanded that internet giant Google postpone rolling out its new privacy policy two days before it comes into effect as it appears to break European Union data protection rules.

“A preliminary analysis shows that these new rules do not respect the requirements of the European data protection directive,” said the National Commission for Computing and Freedom (CNIL), which has been asked to investigate Google’s new user terms by its European counterparts.

The CNIL asked Google to “postpone applying the new rules.”

Google has sought to reassure users that it will protect their personal data, while web users must accept the new terms to continue using its services, including its popular Gmail webmail and its Google+ social media service.

The new terms, which come into effect on Thursday, will allow Google to regroup data from several different services that were previously separate, with one user agreement replacing more than 60 old ones.

Peter Fleischer, head of Google’s Global Privacy Counsel, said in an email to AFP: “We are convinced that we have found the right balance (concerning different EU recommendations by) rationalising and simplifying our policies while at the same time supplying ‘complete information’ to users.”

However, the CNIL said: “Instead of improving transparency, the way the new rules are formulated and the possibility of combining data from different services raises concerns and questions about Google’s real intentions.”

It added: “With the new rules, Google will be able to follow and associate a great part of web users’ activities, thanks to products such as Android, Analytics or its advertising services.

“For instance, the new rules authorise Google to display adverts on YouTube that are connected to a user’s activity on their Android mobile telephone and geolocalisation,” CNIL added.

The CNIL noted that Google currently controls more than 80 percent of the European search engine market, around 30 percent of the European mobile phone market, 40 percent of the global online video market and more than 40 percent of the world Internet advertising market.

Writing in French, Fleischer said Google had “offered several times in recent months to meet the CNIL to answer questions they might have.”

He added: “We want to offer our users an optimised experience with Google’s services and to make our undertakings in terms of confidentiality easy to understand.”

The CNIL in 2011 fined Google €100,000 ($135,000) for having collected private data as part of its controversial 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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