This a rather spectacular case. French media want a bite of Google’s revenue in France. Their argumentation is that the search engine company redirects their users to their website, and earns money out of it. And the French media want a percentage of the money.
So, yesterday, French president, Francois Hollande, met with Google chief, Eric Schmidt, and accordingly the French president is so keen to get Google to pay a percentage to the French media that he presented Eric Schmidt for a new tax of one billion euro that he is ready to charge Google, unless they find a settlement with the french media.
“If the negotiations between Google and the media publishers don’t result in a deal by the end of the year, Google already knows what awaits it from a tax point of view: one billion,” a French Weekly, Canard Enchaine, newspaper is cited by AFP.
According to the newspaper the French government is ready to negotiate the tax, if Google finds a solution with the french media.
If these rumors are true, and the French weekly is correct in their analysis, this story is rather insane.
I could agree with the French media that they should get a bigger lump of the online advertising as they, like most other media in the world, deliver the content which is rather expensive to produce. This content is Google’s livelihood, and it would be fair if they could find some kind of settlement that would make it more lucrative to be an online publisher.
On the other hand Google is driving a business, they are not philanthropists, and, well, they shouldn’t be punished for being innovative and capture and dominate a market like nobody else. And the deliver traffic to the French media’s website’s.
But, if Hollande, uses his powers to threaten Google with a new tax – that otherwise would be negotiable – that’s just insane.