French government urged to tax online ad revenue

A report commissioned by the French Minister of Culture Frédéric Mitterrand urges the introduction of a tax on online advertising such as that carried by Google, which would be used to pay the creators of artistic and other works who lose out to online piracy.

The tax, a small percentage of revenue from online advertising shown to French Internet users, would be honor based, with advertising network operators such as Google, Microsoft, AOL or Yahoo required to declare how much they make.

Such a tax could raise €10 million ($14.3 million) a year for creators, estimated the authors of the report, Creation and Internet.

The authors recognize that France could never introduce such a tax in isolation, noting that ideally the government should encourage other European countries where creators face similar economic challenges to introduce such a tax.

The report was written by Patrick Zelnik, Guillaume Cerutti and Jacques Toubon. Zelnik is president of Impala, a network of independent record companies, Cerutti is a former head of the French consumer protection directorate and Toubon a former Minister of Culture and Minister of Justice known for championing a law enforcing the use of the French language in advertising.

Mitterrand asked the three to report on whether the range of music, films, books and other cultural products offered for legal download is attractive and reasonably priced, and on whether the creators of such products receive a reasonable proportion of the revenue derived from them.

With a significant proportion of online content offered free to consumers, supported by advertising, it was inevitable that the authors would turn their attention to the services by which that advertising is sold and delivered, with Google chief among them.

In their report, the authors also called on the French antitrust regulator, the Authorité de la Concurrence, to look at whether Google has a monopoly on search engine and search advertising services in France, and whether the problems faced by online publishers could in any way be related to Google's business methods.

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