The French government is considering taxing internet companies for the data they collect about users. Nicolas Colin a government official who authored the internet data taxation proposal — one of a slate of tax hikes being floated to the Finance Ministry — says it is mainly aimed at changing the practices of internet giants who profit from supposedly private user data.
Details such as what the tax rate would be are unclear, but implementing such a tax would be another major French financial blow to Google. On February 1, Google agreed to pay a €60 million settlement to a digital publishing innovation fund for French publishers. The settlement came after the other companies complained about Google publishing excerpts of their content. In 2011, French regulators fined Google €100,000 million for insufficiently divulging its data collection methods used in Google Maps. The French private sector hasn’t been kind to Google either. Entrepreneur Xavier Niel created a potential threat to Google and other search engines when it announced Free, an internet service that blocked all adds by default. (Free removed its ad-blocking features on January 8 at the order of the French government, which declared blocking ads a form of censorship.)
While internet privacy has been proclaimed in the E.U. as a citizen’s right, the idea of taxing the profits derived from user data changes the direction of the discussion — it moves it out of the frame of punishing companies for civil-rights violations. This raises another question, however. If user data is taxed, should the users it emanates from get a cut of the revenue? The problem there, unfortunately, is a problem of scale. Enliken, a New York-based startup whose innovative web application allows users to, in essence, pay for content by giving access (the levers of which the user herself controls) to their online-behavioral data to publishers. And Enliken has found that, while the value of aggregate user data remains high enough to support a $154 billion advertising industry in the U.S. alone, when you slice it up on a per capita basis it’s not worth that much: $12 per year.
Part of the tax proposal brought to the French Finance Ministry focused on transparency: companies who tell consumers how their data will be used would earn a tax exemption. This might not end the gripes of privacy watchdogs but it could be a step towards alleviating consumer concern. After all, if Enliken’s numbers are representative, individual users might be thankful for for free access to globe-spanning multilingual search engines, hugely capacious email clients, borderline omnipotent map tools, and more cat videos than the human mind can encompass.