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France aims for US digital tax deal by late August, despite Trump opposition

France wants to reach a deal with the US on taxing tech giants by a G7 meeting in late August, Economy Minister Bruno Le Maire said Saturday.

France aims for US digital tax deal by late August, despite Trump opposition
French Economy Minister Bruno Le Maire. Photo: AFP

He was responding to US President Donald Trump, who on Friday vowed “substantial” retaliation against France for a law passed this month on taxing digital companies even if their headquarters are elsewhere.

The law would affect US-based global giants like Google, Apple, Facebook and Amazon, among others.

Trump denounced French President Emmanuel Macron's “foolishness”, though they discussed the issue by phone on Friday, according to the White House.

Macron confirmed that he had a “long” conversation with Trump, stressing the pair would “continue to work together in view of the G7”.

“We will discuss international taxation, trade and collective security”, he said Saturday.

His office earlier said Macron had told Trump that the tax on the tech giants was not just in France's interest but was something they both had a stake in.

Neither side revealed if they had also discussed Trump's threat to tax French wines in retaliation.

Le Maire took the same line at a news conference Saturday: “We wish to work closely with our American friends on a universal tax on digital activities.

“We hope between now and the end of August — the G7 heads of state meeting in Biarritz — to reach an agreement.”

Leaders of the Group of Seven highly industrialised countries are to meet in the southwestern French city on August 24-26.

Le Maire emphasised that “there is no desire to specifically target American companies,” since the three-percent tax would be levied on revenues generated from services to French consumers by all of the world's largest tech firms, including Chinese and European ones. 

But Deputy White House spokesman Judd Deere noted earlier that France's digital services tax was already the subject of an investigation at the US Trade Representative's office, potentially opening the door to economic sanctions.

“The Trump administration has consistently stated that it will not sit idly by and tolerate discrimination against US-based firms,” Deere said in a statement. 

The French law aims to plug a taxation gap that has seen some internet heavyweights paying next to nothing in European countries where they make huge profits, because their legal base is in smaller EU states.

France has said it would withdraw the tax if an international agreement was reached, and Paris hopes to include all OECD countries by the end of 2020.

The Organisation for Economic Co-operation and Development is a Paris-based forum that advises the world's advanced economies.

READ ALSO: 'I like the way they look': Teetotaler Trump prefers US wine to French

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TECH

Google to appeal €500m French fine in copyright row

Google's legal tussle with French regulators continues.

Google to appeal €500m French fine in copyright row
Google to appeal €500m French fine in copyright row (Photo by ALAIN JOCARD / AFP)

Google on Wednesday said it is appealing a decision by France’s competition watchdog to hand it a €500m fine in a row with news outlets over the use of their content under EU copyright rules.

“We disagree with some of the legal elements, and consider the amount of the fine to be disproportionate compared to the efforts we have put in place to reach a deal and respect the new law,” Sebastien Missoffe, head of Google France, said in a statement.

The fine, issued by the French Competition Authority in July, was the biggest in the agency’s history for a failure to comply with one of its rulings.

Head of Google France, Sebastien Missoffe, has hit back against French regulators (Photo by JACQUES DEMARTHON / AFP)

The watchdog said Google had failed to negotiate “in good faith” with media companies in a long-running legal battle over the internet giant’s use of snippets of articles, photos and videos in search results.

The row has centred on claims that Google has used this content in its search results without adequate compensation, despite the seismic shift of global advertising revenues towards the search giant over the past two decades.

In April last year, the French competition authority ordered Google to negotiate “in good faith” with media groups after it refused to comply with a 2019 European Union law governing digital copyright.

The so-called “neighbouring rights” aim to ensure that news publishers are compensated when their work is shown on websites, search engines and social media platforms.

Last September, French news publishers including Agence France-Presse (AFP) filed a complaint with regulators, saying Google was refusing to move forward on paying to display content in web searches.

While Google insists it has made progress, the French regulator said the company’s behaviour “indicates a deliberate, elaborate and systematic lack of respect” for its order to negotiate in good faith.

The Competition Authority rebuked Google for failing to “have a specific discussion” with media companies about neighbouring rights during negotiations over its Google Showcase news service, which launched late last year.

Missoffe insisted Wednesday that Google “recognises neighbouring rights, and we remain committed to signing agreements in France”.

“We have extended our offers to nearly 1,200 publishers and modified aspects of our contracts,” he said, adding that the company has “shared data demanded of us in order to conform to the Competition Authority’s decision”.

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