France Mulls Taxing Google, Search Engines

Posted by Jim Thompson on January 8, 2010 07:22 PM

In an ideal world, information would be free. All one would need is a machine that could easily access humanity’s abyss of knowledge. Oh. Wait. That’s our world.

Without brands such as Google, Yahoo, and MSN, we wouldn’t be remotely as smart as we are when given 90 seconds and a search engine.

Then why is France’s President Sarkozy so angry, and what’s with this “Google Tax” idea? Put simply, in order to inspire people to create something, you need to pay them. Sarkozy purports that Google unfairly benefits from profits generated from advertising that accompanies information the brand provides but doesn’t necessarily pay for. And he suggests that, somewhere in this argument, French culture hangs in the balance. So Sarkozy wants to tax the situation into being fair.

Every day people pay for eye exams, coffee, shoelaces, and car tires without complaining. But the world wants knowledge -- which can’t be poked, poured, boxed, or unscrewed -- for free. Ask them to pay for it, and watch adults start floundering on the kitchen floor like an eight-year-old without an Xbox.

At brandchannel, we know this all too well.

Brandchannel operates on both sides of this conundrum, providing free content for our readers, while also benefitting -- for lack of a better word -- from the hard work of others, which we compensate for by sending them traffic (the Internet version of karma) via links. Thank you, wired.com.

Many brandchannel readers arrive here via Google. The search engine is simply a branding juggernaut. Not only does Google claim to “Do No Evil,” but the brand rarely does anything wrong. In fact, Google only experiences problems when acclimating to other countries -- cultures, really -- where the Internet is regarded like a zoo animal, both admired and feared. First China, now France.

Google’s rise to dominance, however, engenders a Shakespearean quality in that such success seems fated for some type of tempestuous upheaval, whether from a vengeful relative, scorned lover, or brash venture into the smartphone business. Perhaps the only force preventing Google from the doomed intoxication of unchecked power are countries like France, which is threatening to stop the brand at its border, and ask it a question at the heart of capitalism:

“Hey, what’s in it for me?”

Anyone care to speculate on Google’s reply?

More about: Google, Yahoo, MSN, President Sarkozy, France, Tech

Bill says:

Not only is this proposal rediculous, it represents a rather sordid super-tax on super-successful enterprises in an effort to serve a neo-nationalist agenda. Okay, we're talking France, so everyone kinda 'gets it' (Minitel, etc..) but surely it's not something Sarkozy is really taking seriously - unless of course he has a new friend in Rupert Murdoch... in which case Google could argue all the way to the European court that it should in turn be entitled to impose a charge-back that recognises the value of the wide range of benefits that the French economy currently enjoys as a result of everyone there being able to quickly access all types of information and services. No telling how much that might add up to.

January 11, 2010 03:04 AM #

Ian McKee says:

@bill

Interesting idea - what would be the cost to the French economy if Google banned French traffic and advertising

Imagine no one in France could use Google to find informaton

Imagine no French company could adverise on Google to find new customers.

In short, would Google miss the French more than the French miss Google??

I suggest the latter. Sarkozy'd rehetoric maybe good - but is his thinking?

Ian

January 11, 2010 04:14 AM #

Howboy says:

I think Google will respond as it has in other instances, by seeing what it can do. How remarkable it is for a company not to knee-jerk into denial, defensive posture. And how productive. The deal Google made with US writers over Google Books surprised everyone and thus far everyone seems pretty happy with it. For Google, every "problem" is just an opportunity to invent a new algorithm. Maybe one wonders how far the world can be fractured into micropayments, but evidently Google is going to find out; leading us however reluctantly toward a better, more fairly distributed economy. So, good on France for challenging Google to puzzle over this particular issue.

January 11, 2010 08:21 AM #

Kris Meister says:

I think its important to point out that unlike the US, many (if not all) countries in the EU tax services in addition to taxing goods.
Not taxing services is something we in the US take for granted, but our State treasuries sure feel the impact. Our US tax system still acts like we're a manufacturing economy instead of a service based economy. This a great benefit to our companies, but whos to tell a country they can't tax a specific service. This should be considered part of the ballgame for any company operating in that country. Whats key though is that the tax is applied evenly to all companies in that sector.

January 11, 2010 10:23 AM #

Jusitn Baldwin says:

Unfortunately Tax is a necessary evil. Taxes are collected to pay for good things like Health Care, Education, Social security. It's when taxes are collected to pay for War and subsidies for the Rich and Corporate welfare the whole system starts to crumble under its own weight. I realize this has been going on for time and eternity but HEY! when is this behavior going to stop. Is the system so disfunctional that insane ideas like this keep popping up. As an example of tax insanity, take a look at California trying to tax Marijuana, marijuana is not even legal. It shows that governments have no other options, They have lost the battle against Power. Governments, like us peasants, are, more than ever before, powerless against the Military complex, the Corporations and the Rich. In order to understand the insane desperate logic behind this thinking we need to take a hard look at the Disease not the symptom.

January 11, 2010 10:34 AM #

cici says: