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Tax Google, others, French panel says

Associated Press / January 8, 2010

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PARIS - How to help prop up the ailing music industry? Tax Google, suggests a report commissioned by the French government.

It says Google, along with Microsoft, AOL, Yahoo, and Facebook, should pay a new tax on their online ad revenues to fund the development of legal outlets for buying books, movies, and especially music on the Internet.

It’s the latest idea in France’s effort to fight illegal file-sharing and impose order on the Internet.

The plan “seemed inevitable to us, if we want to maintain a certain pluralism in the culture world’’ and prevent the “endless enrichment of two or three world players who will impose their cultural formatting on us,’’ Patrick Zelnik, a record producer who helped lead the commission, was quoted as telling the newspaper Liberation.

Google appeared cool to the idea but sought a conciliatory tone. The company told the commission it wanted “cooperation between Internet players and the cultural fields to develop new models.’’

President Nicolas Sarkozy said he planned to push forward with several of the report’s ideas. Though he did not specifically mention the Google tax, he said the report’s authors “rightly have proposed’’ asking French competition authorities to weigh on “Google’s dominant position in the online ad sector.’’

Christophe Pelletier, communications director of Yahoo France, said the report seemed to “stigmatize American companies.’’

Critics say the plan would be messy to implement and that Internet portals would shoulder an unfair share of the burden.

The proposal is still in the early stages, and the report does not spell out specifics - like exactly how much new tax the portals would pay, on top of the taxes that they, like all companies, already contribute.