France has developed something of a reputation in trying to tax larger companies on the Internet to use the funds to help out smaller players. The latest development in that scheme: a proposal to tax large booksellers to help French independent bookstores impacted by the rise of online giants like Amazon.
This is a development on a model that has seen proposals to tax online ads from the likes of Google and the revenues made from ISPs, in order to help out media companies that have been negatively impacted by the rise of digital content.
This newest tax, as described by the French daily Les Echos (slightly wonky Google translation here), would be applied not only to books sold online by companies like Amazon, but also those sold in larger physical stores, with the proceeds then going into a fund for smaller booksellers.
Amazon is not the only online bookseller in France — there are some very big local players, too, like FNAC, selling a range of goods in addition to books, just like Amazon does — but it is very popular there. France is also one of the international markets where Amazon has launched its Kindle e-reader and e-books.
The tax was suggested the Minister for Culture, Frederic Mitterand, as part of a longer list of 13 proposals related to the publishing industry.
Other aspects of that larger proposal include more monitoring/control over how books are priced when sold by the bigger companies. Given how aggressively companies like Amazon price their books against those sold in physical stores, and given the bigger investigations being made into e-book pricing in Europe and the U.S., this could end up being a crucial area.
The article also notes, however, that these suggestions are being made in the lead-up to an election, and are most likely being put out there as talking points rather than anything that would actually get implemented soon.
It looks like many of the past attempts to tax Internet companies have yet to come to pass: one suggestion, back in 2010, had been to tax companies like Google that profit from online ads, to funnel the proceeds to “legitimate” content producers like music publishers. Another past suggestion had been to tax ISPs, mobile operators and commercial TV broadcasters in order to fund public broadcasters. A third was to tax ISPs to fund a center for music.
Today’s news comes also at a time when President Nicholas Sarkozy has also started to raise the issue of taxing large Internet companies that profit from online advertising, as a way of getting more corporate taxes from them. Although companies like Google, Amazon and Facebook collectively make more than €3 billion annually in the country, they typically only pay about €4 million in taxes, according to one report from the Digital Economy Commission.
One precedent for all these taxes that has been in effect, however, is between commercial TV broadcasters and the film industry: a portion of the revenues from the former has been going into a fund for the latter for years now.
Amazon.com, Inc. (AMZN), is a leading global Internet company and one of the most trafficked Internet retail destinations worldwide. Amazon is one of the first companies to sell products deep into the long tail by housing them in numerous warehouses and distributing products from many partner companies. Amazon directly sells or acts as a platform for the sale of a broad range of products. These include books, music, videos, consumer electronics, clothing and household products. The majority of Amazon’s...