Google Objects To 'Google Tax'

Google fears innovation will be hampered if the French government implements a proposal in a government-commissioned report to tax online advertising revenue to compensate artists.

The proposal, referred to in the French press as "the Google tax," is one of several that attempt to address what former French Minister of Culture Jacques Toubon, co-author of the report, has characterized as "enrichment without end and without consideration," the revenue that Internet companies have collected, ostensibly through the unauthorized exploitation of intellectual property. If adopted, the tax would affect not only Google but also AOL, Microsoft, Yahoo, and other large Internet companies and service providers.

French authorities have long voiced concern about Google's power and even went so far as to fund a European search project called Quaero several years ago.

The lead author of the report, Patrick Zelnik, is a record producer who runs France's Naive record label.

According to the Associated Press, French President Nicolas Sarkozy has expressed support for some of the ideas in the report but has not specifically commented on the "Google tax."

Singer and former model Carla Bruni-Sarkozy, the French First Lady, is one of Naive's recording artists.

Google, unsurprisingly, is cool to the idea of an online ad tax.

"We don't think introducing an additional tax on Internet advertising is the right way forward as it could slow down innovation," said a Google spokesperson in an e-mail. "The better way to support content creation is to find new business models that help consumers find great content and rewards artists and publishers for their work. Google already supports content creation through partnerships with many French publishers and content creators. In fact, around the world, we distributed more than 4.2 billion euros last year to our partners, helping to fund great content creation."

Google has faced similar compensation claims from book publishers and news publishers, groups that haven't prospered to the extent that Google has over the past few years. As a consequence of being hit up for money for its alleged copyright violations and of dealing with competitors' complaints, it has bolstered its lobbying presence in Washington and sought partnerships where once it might have been content to charge ahead alone. In contrast to the introduction of Google Maps Street View, which turned photography in public places into a privacy problem, Google now treads more carefully. For example, it has withheld facial recognition from its Google Goggles experiment out of consideration of privacy expectations.

Its relatively recent conciliatory stance can be seen in the Android platform's Open Handset Alliance, its Chrome OS ecosystem, and in its outreach to news and book publishers.

Nonetheless, the company still has many enemies that would like to derail its book search settlement and to slow its growth by supporting antitrust and privacy scrutiny from federal agencies.

In an e-mailed statement, Olivier Esper, director of public affairs at Google France, said that Google had contributed to Zelnik's report and had pushed for cooperation between Internet companies and content producers. "We hope that, among the recommendations contained in this report, the ones encouraging such cooperation will be retained," he said. "For example, proposals to simplify and adapt licensing mechanisms to the digital environment. There is an opportunity here to pursue innovative solutions, rather than encouraging to the idea of an opposition between the Internet and cultural industries, which is what this tax proposal does."