France Mulls Online Ad Tax as Google Objects

The French government is considering taxing the online ad industry in order to help offset the impact of digital on other media.

A report presented to the French government this week suggests that each time an ad is clicked, online firms should be charged a levy of between one and two percent of the revenue generated, which would then be used to compensate media and content owners in other sectors, such as recorded music or print media, for example.

The proposal, commissioned by the government, was written by former music executive Patrick Zelnik, former minister Jacques Toubon, and the president of Sotheby’s France, Guillaume Cerutti. It singles out a number of major online ad firms including Yahoo, Microsoft, and search giant Google. According to the Guardian, Toubon told the Libération newspaper in France the aim of the proposal was to curb “the limitless enrichment” of the world’s leading internet players.

In a statement e-mailed to ClickZ, Olivier Esper, Senior Policy Manager for Google in France, countered that argument claiming the tax would in fact hinder innovation. “We don’t think introducing an additional tax on internet advertising is the right way forward as it could slow down innovation. 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,” he said.

Esper went on to argue that Google itself already supports and encourages content creation by helping publishers monetize their content. “We distributed more than 4.2 billion euros last year to our partners, helping to fund great content creation,” he added.

Ultimately, a levy of this nature would appear difficult to impose, given the global nature of the Web and most major players in the online ad space, and there’s currently no indication if or when such proposals might be enforced.

AOL, which was also named in the report, declined to comment.