PARIS — Despite pressure from the United States, the French Parliament on Thursday adopted a new tax aimed at tech giants such as Google, Amazon, Facebook and Apple.
The French government has argued that taxes on big tech firms should be based on where they do business, not just where they’re headquartered – as has been the case up to now. And so the measure would levy a 3 percent tax on certain revenue the companies earn in France.
The Facebook booth at the Vivatech gadgets show in Paris on 2017. France has adopted a pioneering tax on internet giants like Google, Amazon and Facebook despite threats from the U.S. Thibault Camus/Associated Press, file
The Trump administration warned on Wednesday that it would investigate whether the tax unfairly discriminates against U.S. businesses.
French officials stood firm Thursday, brushing off the criticism.
“France is a sovereign state, it decides its fiscal provisions in a sovereign manner, and it will continue to decide its tax decisions in a sovereign manner,” said Bruno Le Maire, France’s finance minister, speaking to the French Senate on Thursday.
“I believe profoundly that between allies, we should and we can settle our differences by other means than threats,” he added.
The so-called “taxe GAFA” – based on the acronyms of the big tech companies – had already passed in France’s National Assembly and was approved on Thursday in the French Senate, the upper house. It will become law after getting a signature from President Emmanuel Macron, for whom the tax has been a priority, and it will be retroactively applied for 2019.
The tax will apply to tech companies with revenues of more than $850 million, with at least $28 million earned in France. It will affect about 30 companies, including U.S., British, Chinese, German and Spanish businesses, along with one French advertising company, Criteo.
(Amazon’s founder and chief executive, Jeff Bezos, also owns The Washington Post.)
The tax is the latest move from Europe designed to gain more control over big tech.
Last year, the European Union implemented a sweeping new set data privacy regulations that have forced companies to offer European citizens greater ability to determine how their personal information is used, stored and sold.
European antitrust regulators have also been far more skeptical of U.S. tech companies than their American counterparts, meaning that Google, Apple and others have been hit with major fines in recent years and forced to alter their business practices. And European lawmakers and regulators have talked about doing more, expressing doubts about big tech’s ability to regulate itself.
This muscular approach has drawn the ire of President Trump, who appeared to lash out last month at the EU antitrust chief, Margrethe Vestager.
“You have a woman in Europe, I won’t mention her name. … She hates the United States perhaps worse than any person I’ve ever met,” Trump told Fox Business, discussing antitrust law.
But if European leaders have generally been tougher on big tech than the U.S. government, the French tax also highlighted that Europe is far from united on tech policy.
Macron pushed hard for an EU-wide digital tax policy. But several EU countries resisted. Notable among those in opposition were Ireland (where Google, Facebook and Apple have their European headquarters) and Luxembourg (where Amazon’s European headquarters is located). Those countries have been successful in luring tech companies with low tax schemes.
Another fault line has emerged as the privacy rules have gone into effect. European tech activists have criticized Ireland’s privacy regulatory agency for what they say is the slow pace of its investigations of suspected violations. The agency says it is simply being meticulous before it pursues high-profile cases.
Le Maire, the French finance minister, admitted in the spring that an EU-wide tax was a dead-end, as it would require the backing of all 28 members of the bloc. So he proposed instead that France go ahead alone.
Britain, Austria and Poland are among those pursuing their own versions. But because France went first, it will face the consequences.
Washington announced an investigation under Section 301 of the 1974 Trade Act, which grants the president the power to impose retaliatory measures against U.S. trading partners.
This was the same measure that permitted the Trump administration to slam China with tariffs last year, though it has rarely been used against so close an ally.
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