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France close to resolving big tech tax dispute with US: Minister

France has made proposals to the United States to resolve the dispute over taxing multinational tech giants that aims to seal the framework for a global deal by the end of the month, Finance Minister Bruno Le Maire said on Friday.

France close to resolving big tech tax dispute with US: Minister
An anti Black Friday action in front of the Amazon France headquarters in Clichy, north of Paris, on November 29, 2019. Photo: Stephane de Sakutin / AFP
“There are possibilities available, we are working with (US Treasury Secretary) Steven Mnuchin. I made several proposals to him,” Le Maire said days before self-imposed deadline to find a resolution expires.
   
On January 7, Paris and Washington set a two-week deadline to end a row over a French tax on multinational tech giants, with a US threat of sky-high retaliatory duties on $2.4 billion of French products from wines to leather handbags still hanging in the air.
   
Le Maire declined to unveil details about the proposals or whether France had made a gesture on the implementation of the tax that would hit US firms like Netflix and Amazon.
   
“We are going to keep that to ourselves for the moment, but I think there is a path to a possible compromise between the United States and France on the issue which would permit both to advance towards the only reasonable solution: an international solution via the OECD,” he added.
   
The deadline coincides with a scheduled meeting on the topic at the World Economic Forum meeting in Davos from January 21 to 24.
 
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France last year approved a levy on tech firms as international efforts dragged on to find a new model for taxing companies who operate mostly over the internet. Currently, they often pay little tax to countries in which they are not physically present even though they earn lots of revenue in them via online sales and advertising.
   
The levy would see them paying up to three percent of revenues earned in France.
 
 Framework agreement
 
Washington says US companies such as Google, Apple, Facebook, Netflix and Amazon have been singled out by the French tax, and threatened duties of up to 100 percent of the value of French imports of such emblematic goods as Champagne and Camembert cheese.
   
After blocking the tech tax talks at the Organisation for Economic Cooperation and Development (OECD) for several years, Washington relaunched them last year only to make proposals in December which France rejected before going ahead with its tax.
   
Le Maire suggested that a resolution of the issue could progress in stages, with the first being a framework agreement on the basis of the text worked out at the OECD.
   
If Washington agrees, the agreement in principle could be approved by OECD members at the end of the month, said the French minister, speaking alongside the director of the OECD, Angel Gurria.
   
Then details about the parameters of the tax could be thrashed out until June, with an implementation of the tax soon thereafter, said Le Maire.
   
He said this was one possible way to end the dispute, and added that France would keep its tax in place until an international levy is agreed.
   
Gurria called the Davos meeting an opportunity to move forward on the issue and said that the OECD, which has helped countries try to find common ground, doesn't have a plan B if talks based on the current text fail.

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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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