France approves internet traffic tax per gigabyte for Amazon and Netflix

The National Assembly of France has approved a tax on every gigabyte of internet traffic transmitted to users within the country. The new regulation targets major tech giants including Google, Amazon, Netflix, and Meta.

• Content providers will pay the state €0.055 for every gigabyte of content distributed to French users.
• Authors led by deputy Laurent Lardit estimate this could bring the government about €10 billion in annual revenue.
• The document has not been finally adopted yet and must be reviewed by the French Senate.
• Internet service providers like Orange Free and Liad will be required to measure data volume and report it.

Mechanics of the New Traffic Tax

According to the amendment, content providers will face a direct fee based on the volume of data sent to French consumers. Given that about 200 exabytes (200 billion gigabytes) pass through French internet service providers annually, with roughly half generated by just five major companies, the financial implications are massive.

The proposal also includes a cap of 15% of a company's revenue in France or 2% of its global dividends. Additionally, it takes into account content delivery networks (CDNs) that store cached copies of online content closer to users to reduce loading times and relieve network congestion.

Debate and Potential Consequences

Proponent Laurent Lardit argues that the tax will primarily impact global technology companies since they generate the vast majority of traffic reaching French subscribers. He disputes claims that platforms will simply pass extra costs to users, citing free services like Facebook, Instagram, and TikTok.

Conversely, opponents in the lower house of the French parliament and Public Accounts Minister David Amiel questioned whether internet traffic can be accurately measured and attributed to specific content providers without introducing burdensome monitoring requirements and privacy risks.

Broader European Digital Tax Context

Several European countries already enforce digital service taxes, typically based on revenues from advertising, marketplaces, and other online activities. Earlier this year, Meta announced additional fees ranging from 2% to 5% in countries including France, Italy, and Spain to offset digital service taxes.

France's new initiative stands out by targeting the actual volume of data transmission rather than just corporate revenue, marking a significant and controversial step in European telecommunications regulation.