France Calls For Investigation of Google’s Dominant Position in Search
CNBC

French President Nicolas Sarkozy said on Thursday that he wanted the authorities to explore whether online advertising revenues of major search engines could be taxed in France as well as their home countries.

Speaking to leaders and representatives of the arts and entertainment sector, he also said he wanted the country's antitrust body to rule on whether Google enjoys a dominant market position in online advertising.

"For the time being, these companies are taxed in the country in which they are headquartered even though they make up a big part of our advertising market," he said.

Sarkozy's comments followed a media report saying France could start taxing Internet advertising revenues from online giants such as Google, using the funds to support creative industries that have been hit by the digital revolution.

The proposal, put forward in a government-commissioned survey, is France's latest challenge to the virtual free-for-all for Internet content.

The country has caused controversy in the past with some of the world's harshest laws on online piracy.

The levy, which would also apply to other operators such as MSN and Yahoo, would put an end to "enrichment without any limit or compensation," Liberation quoted Guillaume Cerutti, one of the authors of the report, as saying.

It would apply even if the operator had its offices outside France, as long as the Internet users who click on ad banners or sponsored links are here, the paper said.

Defending Culture

President Nicolas Sarkozy has repeatedly tried to present himself as a defender of France's cultural heritage in the digital age, most recently calling for public projects to rival Google's plans for a massive online library.

Critics say the issue of compensating authors is a complex one, given that many of the songs, films and texts published online these days are created for free by amateurs outside the cultural establishment.

Cerutti, president of Sotheby's in France, drew up the report together with Jacques Toubon, a former minister, and Patrick Zelnik, a former music executive who has among others produced the songs of France's first lady, Carla Bruni-Sarkozy.

The authors also suggest taxing Internet service providers to raise tens of millions of euros that would be invested in developing the online music business and other creative sectors.

For example, they propose offering government-subsidized online subscriptions and expanding online publishing platforms, said Liberation, which obtained a copy of the report.

In his address to industry players, Sarkozy also unveiled plans to subsidize half the cost of a card -- worth up to 200 euros ($287) -- which young people could use to legally download music from the Internet.

It is desirable that the algorithm for Google SEO be tailored in such a way as to eliminate as much illegal or pirated content as possible.

In recent months, operators and users have faced increased pressure to pay for content from online newspapers to films and books. Under France's new Internet piracy law, repeat illegal downloaders will be disconnected and fined.

The new report was handed into the Culture Ministry earlier this week. It was not immediately clear if the government has a precise timetable to act on it.

Google Fined Per Day In France Over Copyright Issues

USA Today

PARIS — A Paris court ruled Friday that Google's expansion into digital books breaks France's copyright laws, and a judge slapped the Internet search leader with a $14,300-a-day fine until it stops showing literary snippets.

Besides being fined for each day in violation, Google was ordered to pay $430,000 in damages and interest to French publisher La Martiniere, which brought the case on behalf of a group of French publishers.

Google attorney Alexandra Neri said the company would appeal.

The decision erects another legal barrier that may prevent Google from realizing its 5-year-old goal of scanning all the world's books into a digital library accessible to anyone with an Internet connection.

A U.S. legal settlement that would give Google the digital rights to millions of books is in limbo because U.S. regulators have warned a federal judge in New York that the arrangement probably would thwart competition in the budding electronic book market and compromise copyrights, as well.

The top U.S. copyright official and the governments in Germany and France also have raised objections about that settlement overstepping its bounds. Google is trying to address the critics with a revised settlement that is still under court review.

The French case is relatively small in comparison. It didn't even seem to faze investors as Google shares gained $2.48 to $596.42.

Still, the ruling served as a reminder that Google's ambitious push into other markets beyond Internet search increasingly is clashing with fears the Mountain View, Calif., company is getting too powerful.

As part of the backlash, Google has been depicted as a copyright scofflaw that prospers off the content of others — a portrayal the company's management insists is totally off base.

The head of the French publisher's union applauded Friday's verdict.

"It shows Google that they are not the kings of the world and they can't do whatever they want," said Serge Eyrolles, president of France's Syndicat National de l'Edition. He said Google had scanned 100,000 French books into its database, 80% of which were under copyright.

Eyrolles said French publishers would still like to work with Google to digitize their books, "but only if they stop playing around with us and start respecting intellectual property rights."

Philippe Colombet, the head of Google's book-scanning project in France, said the company disagrees with the court's ruling.

"French readers now face the threat of losing access to a significant body of knowledge and falling behind the rest of Internet users," Colombet said in a conference call with reporters. "We believe that displaying a limited number of short extracts from books complies with copyright legislation both in France and the U.S. — and improves access to books."

Colombet declined to answer questions about whether Google would remove the books from its database or pay the fine. "We are going to study the judgment carefully over the coming days," he said.

The judgment will have little or no effect on Internet users outside of France. And French books that are in Google's database with publishers' consent will remain searchable, even in France. Colombet could not say how many French books Google has scanned overall, or how many French publishers allowing Google to show its works.

Google has scanned more than 10 million books worldwide since 2004, including 2 million with the consent of about 30,000 publishers, About 9,000 of those publishers are in Europe, Colombet said. Another 2 million books in Google's library no longer are in copyright. Google has been only showing snippets from the remaining books while it tries to iron out copyright disputes.

French President Nicolas Sarkozy has made catching up on France's digital delay one of the national priorities by earmarking euro750 million (about $1 billion) of a euro35 billion spending plan announced earlier this week for digitizing France's libraries, film and music archives and other repositories of the nation's recorded heritage.

Earlier this week a consortium of French technology companies announced a plan to create a book scanning project they said would be better than Google's, but only in three years time.