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Text by News Wires

Latest update : 2010-01-07

The big Internet players are up in arms at a proposed new tax that may be slapped on web advertisements. The proposal follows complaints by media companies who say Internet giants such as Google are profiting from their content for free.

AFP - France may slap a "Google tax" on online advertising under proposals that drew complaints from the Internet sector on Thursday.

The proposal was one of several in a government-commissioned report submitted on Wednesday following complaints by media companies that Internet giants such as Google are profiting from their content for free.

The report recommended ways to boost the availability of cultural material online while also protecting artists' and the media's intellectual property.

The report suggested taxing the online advertising sector as well as Internet providers and using the revenue to aid creative sectors such as the music industry, which are struggling to adapt to the age of downloads.

This could raise up to 50 million euros (70 million dollars) this year, according to the plan.

The report's lead author, record producer Patrick Zelnik, said the tax would take "a small percentage" of Google's online ad revenues, which he estimated at 800 million euros a year in total, according to Liberation newspaper.

The report by government-commissioned experts dubbed the plan a "Google tax", but said it could target other big Internet players such as Microsoft, AOL, Yahoo and Facebook.

The digital media think thank Renaissance Numerique, whose members include business leaders, said the tax proposal penalised advertisers unfairly.

"Let's stop demonising the Internet and consider the benefits the web brings," said its co-president Christine Balague in a statement.

"Neither online advertisers nor Internet service providers are robbing artists," he added. "Quite the contrary: they are taking part in... bringing consumers and artists together."

The report also proposed public subsidies for a voucher card system to buy music files online, in order to encourage legal means of downloading media files and "streaming" content in real time.

French media companies have complained in recent months that their online material is being used for free via services such as Google, the world leader in Internet searches.

The report followed a government reform that came into force this month to punish users who illegally download films and music on the Internet.

But it also tapped into the issue of cultural autonomy, amid fears in France of the growing might of Internet giants such as Google.

Taxing online ads "seemed inevitable if we want to preserve cultural pluralism and prevent... the never-ending development of two or three world players," Zelnik was quoted as saying on Thursday by Liberation.

The SACD society of authors and composers said it was "satisfied" with the proposals which would "encourage and stimulate the legal availability of works to the public."

Date created : 2010-01-07


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