France eyes profits from smartphones and tablets
The president has asked businessman Pierre Lescure to find ways of funding the arts, as the economy continues to struggle.
France slipped back into recession in the first quarter of the year and the European Commission expects the economy to contract 0.1 per cent in 2013.
Mr Lescure believes a 4 per cent tax on the sale of smartphones and tablets, namely Apple iPhone and iPad and Google Android products, could boost government revenues as consumers spend more on hardware than on content.
"Companies that make these tablets must, in a minor way, be made to contribute part of the revenue from their sales to help creators," Culture Minister Aurelie Filipetti said.
The move would bring Apple and Google in line with TV and radio broadcasters and internet service providers, which contribute part of their earnings to fund the arts in France. But, coming hard on the heels of Mr Hollande's moves to increase taxes on the rich and force cuts in bankers' bonuses, the proposed tax has already stirred up controversy. DigitalEurope, which lobbies in Brussels for smartphone makers, said the tax was "a move in the wrong direction".
It also risks alienating further the world's leading technology companies after Arnaud Montebourg, the Industrial Renewal Minister, blocked Yahoo!'s bid to buy the Gallic version of YouTube.
French officials are pushing to ensure their artistic products remain exempt from free trade rules during talks on a planned trade agreement between the European Union and the US. President Barack Obama will visit Europe next month to launch the talks which, if successful, would create the world's largest free-trading bloc.
Frequently Asked Questions about this Article…
France is considering a proposed 4% tax on the sale of smartphones and tablets (explicitly mentioning Apple iPhone and iPad and Google Android products). The revenue would be used to finance the production of French art, films and music after President Hollande asked Pierre Lescure to find ways to fund the arts amid a struggling economy.
The proposal targets makers of smartphones and tablets — notably Apple (iPhone and iPad) and companies selling Google Android products — bringing them in line with TV and radio broadcasters and internet service providers that already contribute to arts funding in France.
The rationale given is that consumers currently spend more on hardware than on content, so a 4% levy on device sales could generate additional government revenue that would be redirected to support creators and the production of art, films and music.
The proposal comes as France slipped back into recession in the first quarter and the European Commission expected slight contraction in 2013. It follows President Hollande's broader moves, including higher taxes on the wealthy and limits on bankers' bonuses, and is part of efforts to find new cultural funding sources.
Industry lobby group DigitalEurope criticised the idea, calling it 'a move in the wrong direction.' The proposal has stirred controversy and risks straining relations between the French government and global technology companies.
Article events cited include Industrial Renewal Minister Arnaud Montebourg blocking Yahoo!'s bid for the Gallic version of YouTube and the proposed device tax — both of which could signal tougher government stances toward tech deals. Investors may view such developments as potential political risks to tech companies operating in France.
French officials are pushing to ensure artistic products remain exempt from free trade rules during planned EU‑US trade agreement talks. The trade negotiations — which President Obama was due to help launch — could shape how cultural exemptions and measures like a device levy are treated in broader trade rules.
Investors should follow official government decisions and Lescure's recommendations, reactions from affected companies and industry groups like DigitalEurope, any legislative steps in France, and outcomes of the EU‑US trade talks that could affect cultural exemptions and the regulatory environment for tech firms.
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