A French tech industry group plans to challenge France’s new digital tax under EU law.
The internet services lobbying group ASIC, whose members include Amazon.com Inc., Facebook Inc., and Google, will file complaints against the tax with the European Commission in the next few days, the group’s head, Giuseppe de Martino, said July 25.
French President Emmanuel Macron signed the tax into law July 24, and it was published in the official gazette July 25.
The law imposes a 3% tax on companies with digital revenue of at least 750 million euros ($836 million) worldwide and 25 million euros in France. It targets the revenue that companies make from digital advertising, and platforms that connect buyers and sellers.
ASIC, the Association des Services Internet Communautaires, is bringing complaints against the tax on the grounds that it’s unlawful state aid and breaches the rules of the EU’s internal market, de Martino said. State aid rules ensure countries aren’t giving unfair advantage to domestic companies.
Critics of the tax have warned that it could be vulnerable to state aid challenges because the majority of the companies it targets will be foreign, particularly American. The tax will hit about 30 companies, French officials have said. Very few are expected to be French companies.
The filing of a complaint doesn’t guarantee the commission will open a formal investigation. The commission didn’t respond immediately to a request for comment.
The French tax is modeled after a 2018 proposal from the European Commission itself for an EU-wide digital tax. That proposal stalled earlier this year because it didn’t have unanimous support from EU members.
The French measure is already facing an investigation from the U.S. Trade Representative’s office into whether the tax discriminates against U.S. businesses. As an outcome of that investigation, the U.S. could impose tariffs or other retaliatory measures against France.
—With assistance from Joe Kirwin.