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FACEBOOK VS FRANCE

FACEBOOK

Facebook to face trial in France over nude painting

A Paris appeals court passed a landmark ruling on Friday after deciding France has jurisdiction to judge a case against US social networking site Facebook which blocked the account of a French teacher who posted an image of a nude painting.

Facebook to face trial in France over nude painting
THe Gustave Courbet painting "The Origin of the World" Is it art or pornography? Photo: AFP

The French court threw out Facebook's appeal after the social media giant argued that only US courts had jurisdiction to hear cases against it.

Instead the court backed the March 2015 ruling which said Facebook's clause forcing all users to agree that any litigation must be based in California, where the site is based, was “abusive.”

Facebook is being sued by a French father of three whose account was blocked after he posted a 19th century painting by Gustave Courbet, “The Origin of the World”, depicting a woman's genitalia.

The irate teacher filed a complaint in a French court saying the site could not differentiate between pornography and art.

But in a hearing on January 22, Facebook's lawyer Caroline Lyannaz argued that the site did not fall under French jurisdiction as users have to sign a clause agreeing that only a California court can rule in disputes relating to the firm.

The social media giant closed its legal arm “Facebook France” in May 2012, meaning complaints have to be filed in the US.

The teacher's lawyer Stéphane Cottineau hailed the court ruling as a “first victory won by David against Goliath”.

“It's hugely significant because this decision creates jurisprudence not just for Facebook but for other social media networks who use their being headquartered abroad, mainly in the United States, to attempt to evade French law,” Cottineau told The Local.

“They might be multi-nationals but the court ruling means they are not outside French law. If they set up in France and contract workers here then French law must be applied to them,” he added.

The lawyer said this was an “abusive clause” as none of the 30 million Facebook users in France “can ever take recourse to French legal jurisdiction in the event of a dispute.”

He now expects a court in France to hear the teacher's case, when it will have to decide whether or not his freedom of expression had been violated when Facebook blocked his account.

Cottineau said he was finally “satisfied” that French courts can now rule over “Facebook's failure to make a difference between art and pornography and the question of freedom of expression on the social network.

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FACEBOOK

Facebook agrees with France to pay €106 million in back taxes

US social media giant Facebook on Monday said it had agreed with the French government to pay €106 million in back taxes for its French operations over a 10-year period from 2009, and to pay 50 percent more tax in the current year.

Facebook agrees with France to pay €106 million in back taxes
Many of the US digital giants have their EU headquarters in low-tax-regime countries. Photo: AFP

“We take our tax obligations seriously, pay the taxes we owe in all the markets in which we operate and work closely with tax administrations around the world to ensure compliance with all applicable tax laws and resolve any disputes,” a Facebook France spokesperson said in a statement.

The statement said that since 2018, Facebook changed its sales structure so that “income from advertisers supported by our teams in France is registered in this country”.

“This year we are paying €8.46 million in income tax, an increase of almost 50 percent compared to last year,” it said. 

“We have also entered into an agreement with the tax authorities covering the years 2009-2018, under which we will make a payment of €106 million.”

The payment by American digital giants of tax on revenues in the country in which they are accrued has been the subject of a longstanding conflict between France and the United States. 

Big EU countries say the so-called GAFA – Google, Apple, Facebook and Amazon – are unfairly exploiting tax rules that let them declare profits in low-tax havens, depriving governments of a fair share of their fiscal payments.

Many of the US digital giants have their EU headquarters in low-tax-regime countries. 

The dispute between France and the United States on the digital giants' tax has escalated to the extent that the United States in July unveiled heavy import duties on France.

The office of US Trade Representative Robert Lighthizer found France's digital services tax was discriminatory and “unfairly targets US digital technology companies,” and said it would impose punitive duties of 25 percent on $1.3 billion worth of French products.

But it will hold off on collecting the fees to allow time for the dispute to be resolved.

READ ALSO: Trump's US wine tariffs 'threaten 100,000 jobs in French countryside'

 

In the meantime, France, Britain, Spain, Italy and others have imposed taxes on the largest digital companies.

US officials have slammed these moves as discriminating against American firms, and say any new levies should come only as part of a broader overhaul of international tax rules.

In January, 137 countries agreed to negotiate a deal on how to tax tech multinationals by the end of 2020, under the auspices of the Paris-based Organisation for Economic Co-operation and Development.

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