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France and US reach agreement on internet tax after tariffs threat from Trump

French President Emmanuel Macron said on Monday that G7 members had reached an agreement on the taxation of tech giants, a long-running subject of friction between France and the US.

France and US reach agreement on internet tax after tariffs threat from Trump
The 'GAFA' tax is named after Google, Amazon, Facebook and Apple. Photo: AFP

“On the digital tax we have reached a deal to get beyond the difficulties we had between us,” Macron told a press conference with US President Donald Trump at the G7 summit in Biarritz, adding France would scrap its own digital tax once the new international levy is in place.

Trump had reacted furiously to French plans to tax multi-national giants like Google, Amazon, Facebook and Apple, threatening to retaliate with tariffs on French wine.

READ ALSO French winemakers face anxious wait over US tariff threat

The French law nicknamed the GAFA tax would require companies to pay a three percent tax on digital gross sales in France from January 1st, 2019.

Many tech giants such pay virtually no tax in countries where they make vast profits, due to how they declare they global income.

The French tax was introduced after Macron failed to persuade other European leaders to implement an EU wide tax on tech firms, but Macron had always been hopeful that an international agreement could be reached.

He has said that France's tax would be scrapped once a new international levy is in place.

 

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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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