Will the global internet giants be forced to pay for Europe's Covid bailout?

Worldwide winners: the screen symbols for the GAFA companies, Google, Amazon, Facebook and Apple.
Worldwide winners: the screen symbols for the GAFA companies, Google, Amazon, Facebook and Apple. Lionel BONAVENTURE / AFP
3 min

The European Union has agreed to a 750 billion euro plan to kick-start the trading bloc's economy. But where is the money going to come from? President Emmanuel Macron has guaranteed that the French taxpayer will not have to shoulder the burden, saying that new taxes will be imposed on "major international businesses". Should global industry be quaking in its well-heeled boots? 


There are three levels of taxation proposed to finance Europe's "historic" effort to get back in business.

Emmanuel Macron says the three areas under active consideration are a charge for non-recycled plastic products, a revised carbon tax, and a levy on the profits of the global internet giants.

France has already lost one battle in the war against the techno-industrial group known as GAFA, the acronym for Google, Apple, Facebook and Amazon.

Using the mechanisims offered by the Organisation for Economic Cooperation and Development (OECD), Paris has already opened negotiation with other interested countries, including the United States, with a view to ensuring that the internet majors pay their fair share of tax on the enormous profits which they make in Europe.

Those talks have stalled.

Uniting against GAFA

The French President remains convinced that a concerted European Union effort is the best way to force the billionaire businesses to accept their financial responsibilities.

Especially since, according to Emmanuel Macron, "the big players in the information sector have seen their profits soar during the Covid crisis . . . they don't even pay VAT, they don't have the same pressures as local companies and small and medium enterprises."

As part of this week's financial re-launch package, the European Commission has been given until early 2023 to formulate and institute a tax on the digital companies.

Non-recycled plastic will be taxed from as early as next year, though the details remain to be established.

The commission has also been told to come up with a reform of the existing carbon market rules intended to limit pollution.



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