France at the gates of the Silicon Desert

Is taxing the digital, innovation, growth and jobs of tomorrow really a "rich" idea?

Philippe Marini, Chairman of the Senate Finance Committee, presented yesterday morning his proposals for a tax aimed at digital players. Unsurprisingly, innovation is once again being singled out.

While France has to "seek growth with its teeth", theASIC is alarmed by this new and ongoing desire to handicap the development of digital players on French territory.

Today, digital technology is the source of a quarter of French growth and therefore enables the creation of many jobs. However, between now and 2015, the contribution of this sector to French growth will be 3 to 4 times less than that of the United Kingdom and other European countries. "France dreams of a Silicon Valley. It is heading straight towards a Silicon Desert", ASIC leaders recall. "Instead of trying to prevent any innovation in France, it would be preferable to actively and sustainably support its development.

Advertising tax, a dangerous measure for an entire ecosystem

Online advertising is now one of the main business models of the Internet. It benefits not only community sites, but also a range of actors such as the online press or news sites. It has also become an additional income for public service broadcasting.

This tax on online advertising would then automatically be deducted from the revenues of the startups, which would in fact be the first to pay it.

If the project wishes to introduce thresholds, it is to better conceal a reality: applied to advertising agencies, the tax will penalise all sites which by nature mutualise the marketing of their spaces in the hands of these intermediaries.

Taxing advertising agencies means taxing all websites, big or small. All French digital content would then be taxed.

Finally, it is surprising that the project has completely forgotten that such a measure will also impact sectors such as legal online offer (music, video, press), where a part of the revenue comes from advertising revenues or from sharing these revenues. This taxation could therefore have an effect on the very development of the legal offer.

For ASIC, it is urgent that the French Government bring the subject to the Community level so as not to further isolate France in a digital single market that is being created.

About the Community Internet Services Association (CISA)   www.lasic.fr

The Association des Services Internet Communautaires (ASIC) is the first French organisation to bring together web 2.0 players and aims to promote the development of the "new internet". It was founded by AOL, Dailymotion, Google, PriceMinister and Yahoo! and also brings together Allociné, blogSpirit, Deezer, eBay, Ebuzzing, Exalead, Facebook, LaCartoonerie, Microsoft, Myspace, Skype, Skyrock, Spotify, Uplood, Vivastreet, Wikimedia and Yakaz. ASIC is chaired by Giuseppe de Martino, Secretary General of Dailymotion, and Pierre Kosciusko-Morizet, President of PriceMinister.

(Source: Bermuda Agency - 27 June 2012)

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