How the US-French Connection Became a Digital Divide

Earlier this week, reports surfaced that the United States had thwarted France’s plans to propose new international tax regulations targeted at digital companies like Google and Amazon — each of which, by the way, have irked France aplenty in recent months.

Indeed, this is not the first time U.S. tech companies have rubbed France the wrong way. In the past, France has

• threatened to force Google to pay for displaying snippets from French media articles;
• discussed forcing high-bandwidth-consuming Internet companies — YouTube, that’s you — to pay extra fees;
• floated regulations that could prohibit some of Amazon’s discounts and free shipping offers; and
• talked about fining Google for its privacy policies.

To break down France’s recent digital-specific tax proposals — as well as the myriad gripes that came before — TechNewsWorld welcomes Hugh Carnegy, Paris bureau chief for the Financial Times. In this interview Carnegy breaks down France’s philosophy toward tech giants and talks about whether or not France’s annoyance with U.S. tech companies has anything to do with the fact that they are, well, from the U.S.

Listen to the podcast (20:11 minutes).

Here are some excerpts from the podcast:

TechNewsWorld: Before we get into the nuts and bolts of France’s proposed regulations, I want to ask you first about the general philosophy in France, in Paris, regarding tech companies, and specifically these U.S. tech companies. I’m of course an outsider when it comes to France, but there seems to be — especially over the last several months — a sort of resentment, or at least annoyance, with the aforementioned companies like Google and Amazon. I wonder if there is a consensus opinion in France, or at least among French policymakers, about these U.S. companies and them being somewhat out of bounds.

Carnegy: Well, I think in general what you can say is the French government, the French policymakers, do have a pretty interventionist approach towards all the issues that get thrown up by, as it were, the new ways of doing business digitally and on the Internet. That, of course, inevitably brings them in confrontation — if that’s the right word — with U.S. companies, which tend to dominate in these big areas.

Now, I think it’s important to say that … France isn’t building a fortress against the Internet and closing its eyes to the way the world is going. Indeed, you have in France quite a lot of very enterprising French companies that are doing very well in the digital space and are making a name for themselves internationally.

France is quite a wired country. It’s not at the top of the tables, but it’s definitely well in the middle. It’s a country, after all, that had a precursor to the Internet 30 years ago called Minitel — which was actually wound up a year or so ago — which was a way of connecting French households and was incredibly popular. So there is a degree to which it’s wrong to portray France as some kind of holdout against the march of time.

Having said that, the French have shown themselves to be quite willing to intervene in all kinds of levels when they encounter issues that are posed to them by companies like Amazon, like Google — basically across the board, Yahoo and so on. So in recent months we’ve had some very clear examples of that.

TechNewsWorld: Forgive me if this is too American a question, but I’m wondering if it matters that the companies we’ve been talking about — Google, Amazon, Yahoo, eBay — are American. The U.S. and EU generally get along quite well, but nonetheless I can’t help but notice that the main culprits, kind of the villains of the European tax structure, are American companies. Would we be seeing the same reaction, do you think, if these companies were born in, you know, Australia or South Africa? Does it matter at all that they’re U.S. companies?

Carnegy: I think that there are some tensions, longstanding, between France and the United States on various levels. You’ll remember during the Iraq war how there became in America a sort of strong stream of anti-French feeling because the French wouldn’t support the war.

TechNewsWorld: Freedom fries!

Carnegy: Freedom fries — exactly. So let’s not pretend that everything between the U.S. and France is always hunky-dory. So in that context you could say that, yes, there is a certain tension, a kind of feeling that the U.S. is this big juggernaut against which it’s pretty hard to resist, particularly on the commercial front.

That’s flavored, I think, by … a concern that we’re in a world increasingly dominated not just by America, but by English, and the effect that that has on cultural services and cultural products — movies, music, etc. It’s a massive tide that’s hard for a rich culture like French, which has now become — unfortunately, from a French point of view — a minority language and minority culture. It’s hard to defend against. So there’s a definite issue and element there that does lead to tensions surfacing.

On the other hand — and one should acknowledge these things — the French in many ways absolutely adore American culture. They consume American movies, American music … American TV shows — I mean, you only have to turn on your TV in France after 9 p.m. and it’s absolutely filled with CSI: NY, CSI: Miami, et cetera, et cetera, et cetera. You just can’t avoid them; they’re all over the place. So there is an ambivalence there, I think.

I think in terms of attitude to the big companies, yes, they’re American, and yes that maybe grates a little bit, but I think it’s ultimately more an issue of the fact that these companies are posing new issues in terms of the ways that business is working in the digital age. I think if Google and Amazon and Yahoo and Apple and so on were Chinese, for example, I think the French would be acting exactly the same way.