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France uses new EU data law to fine Google €50 million

France's data watchdog announced Monday a fine of 50 million euros ($57 million) for US web search giant Google, using the EU's strict General Data Protection Regulation for the first time.

France uses new EU data law to fine Google €50 million
Photo: AFP
Google was given the record fine from the CNIL regulator for failing to provide transparent and easily accessible information on its data consent policies, a statement said.
 
Google was handed the record fine from the CNIL regulator for failing to provide transparent and easily accessible information on its data consent policies, a statement said.
 
The CNIL said Google made it too difficult for users to understand and manage preferences on how their personal information is used, in particular with regards to targeted advertising.
 
“People expect high standards of transparency and control from us. We're deeply committed to meeting those expectations and the consent requirements of the GDPR,” a Google spokesperson said in a statement.
 
 
Photo: AFP
   
“We're studying the decision to determine our next steps.” 
   
The ruling follows complaints lodged by two advocacy groups last May, shortly after the landmark GDPR directive came into effect.
   
One was filed on behalf of some 10,000 signatories by France's Quadrature du Net group, while the other was by None Of Your Business, created by the Austrian privacy activist Max Schrems.
   
Schrems had accused Google of securing “forced consent” through the use of pop-up boxes online or on its apps which imply that its services will not be available unless people accept its conditions of use.
   
“Also the information provided is not sufficiently clear for the user to understand the legal basis for targeted advertising is consent, and not Google's legitimate business interests,” the CNIL said.
 
“The amount decided, and the publicity of the fine, are justified by the severity of the infringements observed regarding the essential principles of the General Data Protection Regulation (GDPR): transparency, information and consent.” 
 
“Moreover, the violations are continuous breaches of the Regulation as they are still observed to date. It is not a one-off, time-limited, infringement.”
 
Special responsibility
 
The GDPR is widely considered the biggest shake-up to data privacy regulations since the advent of the web.
   
Even companies which are not based in Europe must follow the tough new rules if they want their sites and services to be available to European users.
   
The CNIL found that despite changes implemented by Google since last year, it was still failing to respect the spirit of the new rules.
   
It noted for example that specifics on how long a person's data is kept and what it is used for are spread across several different web pages.
 
France to appeal after Google escapes €1.1bn tax bill
Photo: AFP
   
Modifying a user's data preferences also requires clicking through a variety of pages such as “More Options”, and often the choices to accept Google's terms are pre-checked by default.
   
“This type of procedure leads the user to give global consent… but the consent is not 'specific' as the GDPR requires,” the regulator said.
 
It said the record 50-million-euro fine reflected the seriousness of the failings as well as Google's dominant market position in France via Android.
 
“Each day thousands of French users create a Google account on their smartphones,” the CNIL said. 
   
“As a result the company has a special responsibility when it comes to respecting their obligations in this domain,” it said.
 
It is not the first time the regulator has taken Google to task over its policies.
   
In 2014 it fined the company 150,000 euros — the maximum possible at the time — for failing to comply with its privacy guidelines for personal data.
 
And in 2016 it imposed a 100,000-euro penalty over non-compliance with the EU's “right to be forgotten” rule, allowing people to request having references to them removed from search results.
   
Goole has contested the decision, saying it should apply only to its European sites, such as Google.fr, and not the global Google.com domain.
   
Earlier this month the advocate general for the European Court of Justice in Luxembourg sided with Google in the case, though a final ruling has not yet been announced.

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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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