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‘We can be proud:’ France becomes first country to adopt EU copyright reform

The French parliament on Tuesday adopted a copyright reform to ensure media are paid for original content, typically news, offered online by tech giants such as Google and Facebook.

'We can be proud:' France becomes first country to adopt EU copyright reform
Photo: AFP

The revamp to European copyright legislation, adopted by the European Parliament in March, was agreed by the French lower chamber in a final reading, making France the first country to adopt the directive.

“We can be proud to be the first country to enshrine the EU directive into national law,” said Culture Minister Franck Riester.

“This text is absolutely essential for our democracy and the survival of an independent and free press,” he added. 

The creation of what is known as the “neighbouring right” to copyright protection was loudly backed by media companies and artists, who want to secure revenue from web platforms that allow users to distribute their content.

It was strongly opposed by internet freedom activists who say it will be restrictive, acting as a “link tax” which will discourage internet discourse, and by Silicon Valley, especially Google, which makes vast profits from the advertising generated alongside the content published on its pages.

ASIC, an association of tech companies which includes Google and Facebook, said there was insufficient clarification of what the “neighbouring right” provision covered and did not define the best balance between free circulation of information and copyright protection.

At the same time, ASIC noted that the legislation included exceptions which would help ensure a free flow of information and access to it over the internet.

Major publishers including AFP have pushed hard for the reform, seeing it as an urgent remedy to safeguard quality journalism and help bolster plummeting earnings of traditional media companies.

The EU copyright directive is due to be adopted by all member states by April next year.

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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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