French Davos Castigates U.S. Web Giants for Not Playing Fair

(Bloomberg) -- What was meant to be an opportunity to mingle in the sun in a southern French city turned partly into a public denunciation of tax practices of U.S. web giants.

Aix-en-Provence is host to an annual weekend gathering of politicians and chief executives that is sometimes described as a more relaxed (and warmer) version of Davos. Decision-makers can network between talks at a local university and cocktail receptions at a private mansion-turned art museum before heading to a night at the opera.

This year, the U.S. internet giants didn’t have an easy ride. In public sessions over the weekend, companies such as Alphabet Inc.’s Google, Amazon.com Inc. and Netflix Inc. have borne the brunt of discontent by politicians, companies and the public alike. There has been public outrage in France in recent years for what many consider to be low levels of taxes paid by businesses that generate hundreds of millions in revenues.

“France took the leadership on taxing Google, Apple, Facebook, Amazon, and believe me, we will manage to tax the Internet giants by the end of 2018 or at the latest early 2019 because it’s not only a question of justice but also of sovereignty,” Economy Minister Bruno Le Maire said in a panel on Sunday, in comments welcomed by the audience.

Network Infrastructure

Earlier Alain Weill, chief executive officer at Altice Europe NV -- owner of French telecoms company SFR -- said though Google and Netflix benefit from the domestic network infrastructure and urge local operators like SFR to improve it, they aren’t required to contribute by making investments themselves.

Part of the problem rests with the legal framework, Weill said, urging lawmakers and regulators to level the playing field.

“Rules for pure players like Netflix should be the same as the rules for more traditional companies,” he said. He gave the example of Google being allowed to do targeted ads while TV networks in France cannot.

“That’s what lawmakers should be working on,” he said. “Otherwise we are victims of discrimination.”

His view was echoed by Xavier Bertrand, leader of a province in northern France, who described the current state of play as unfair competition.

Sebastien Missoffe, the managing director of Google France, said that the search giant had paid an average corporate tax rate of 26 percent annually in the past decade. “We cannot suggest that Google doesn’t pay taxes,” in France, he said. The audience’s reaction: boos.

©2018 Bloomberg L.P.

Bloomberg
Stay Updated With Business News News On BloombergQuint