Google and Yahoo Against France

Relations between France, Europe and the giants of the Internet are increasingly crazy. Now with film, the video website Netflix is preparing its landing in France, apparently following all the rules and paying visits to parliament. All the film industry’s producer’s unions have already placed one condition on this arrival: that Netflix establish headquarters in France and that it pay import and regular taxes.

For the moment, Netflix is recruiting its French team in order to station it in Amsterdam. It would be a first if it respected French law, because this is a territory where Google remains the “big bad”: For months now, rumors have been making the rounds regarding a tax adjustment. The French government would ask for more than 1 billion euros, because the giant confines its turnover to its European headquarters in Ireland.

However, the French position is ambiguous: Last December, Minister of Culture Aurélie Filippetti boycotted one of its protests, which had the merit of consistency, but as a result, Digital Technology Minister Fleur Pellerin came kowtowing to push her aside. Why? Even worse, France Télévisions, dependent on the Ministry of Culture, thumbed its nose at its ministry while cooking up a deal for municipalities and partnering with Google.

In summary, Google mocks the French state but sponsors municipal elections, and a public company is becoming evident at its side. This company prefers to spend money on lobbying to please politicians instead of on the welfare of the French by taking on its role as a taxpayer. We cannot but agree with Arnaud Montebourg when he wants to require France to limit the handling of all data that originates there, which would provide a legal basis for its taxation … but this seems to surprise us still: Pellerin, who is hierarchically dependent on Montebourg, has said nothing. And Montebourg released his bomb before a visit by President Hollande to Silicon Valley. Where is the consistency? Above all, where is the real political will beyond the armed reels of the media’s viewfinders?

And it’s worse at the European level. Brussels is incapable of uniting all governments in taxing these groups that are averse to the public interest. The European commissioner for competition even ended up clearing Google of all the grievances at which he was taking aim. And Joaquin Almunia had the audacity to explain that no one before him had ever gotten as many concessions out of the giant.

Let’s explain: In Europe, Google makes use of a monopoly on research and profits from it in order to systematically promote its products and eliminate competition in the areas of price comparison, maps and — tomorrow — the cost of travel, etc. Rather than condemning it, Europe simply made sure that besides its own connections Google made room for those of other companies, on the condition that they pay for this. Therefore, Europe gave up helping its own businesses to favor the U.S.

It was a defeat in an empty battlefield for Brussels, which, furthermore, had nothing to lose in this fight since most of the valuable jobs Google adds are in the U.S or Switzerland, and its taxes finance no one. Then why kowtow to it?

By the way, its success in the matter is such that Yahoo is going to imitate it. This company, with headquarters in France that provide more than merely a few jobs, will be announcing that it will send everyone packing and move its French activity to Ireland. The company, which was also subject to a tax adjustment, has not declared anything in France, but there are lost jobs and data that evade the control of Internet users and French authorities.

Part 2: Correction, added Friday, Feb. 7

There is total refutation from Montebourg’s office: No, the minister of industrial renewal never wanted to throw Google out of France, as many of us wrote yesterday. “We had to evaluate the information and refute it the fastest way possible,” a spokesperson for the minister, who had not responded to our calls yesterday, said today.

Everything started from a Europe1 news flash — “Montebourg Stands Firmly Opposed to Google” — which affirmed that the minister wanted to make Google illegal in France, unless the giant would agree to house French data on servers in France. In fact, Montebourg had not spoken on the subject since February 2013, for 20 minutes. “He did not want to hunt Google, but he wanted to explain that it was necessary to get companies like Google and Facebook to invest in servers stationed in France in order to carry out the handling of data concerning the French there,” said one of his advisers. A few weeks after this interview, the minister derailed an agreement between Orange and Yahoo for the recovery of Dailymotion. The minister, known for his “made in France” positions but equally influenced by the ideas of Pierre Bellanger (who is going to publish them in “The Digital Sovereignty,” in the Stock editions), was irritated to see one of the rare jewels of the French Web run under an American banner.

Since this episode, which did not make friends of them, Montebourg left Pellerin, his minister in charge of digital information, in control of these files.

Therefore, there will be neither a war nor a fatwa launched against Silicon Valley, just a few days before Hollande is to go there on tour. That would not have been surprising coming from Montebourg, but this is not the case. The minister will soon have a chance to jump back to the fore if he feels the need: first, when we discover the conditions under which Yahoo will transfer its French activity to Ireland, which should entail job cuts in France. Then, when we know exactly how Orange will settle the file of its subsidiary Dailymotion: Its CEO Stéphane Richard has been searching quietly for a buyer for the video distributor. He holds 100 percent of the capital, but he has never had a clearly defined strategy to develop it, nor comparable means to those of Google and YouTube. A roundtable of several agents of the American Web should therefore soon be in charge of Dailymotion, without a doubt, with Microsoft at the lead.