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Posted in International/EU Privacy

English Version of Proposed French Privacy Tax Report Available

Login photoIn January, we reported on a controversial report proposing, among other things, a tax on the creation of digital profiles of French consumers. The tax would encourage privacy-friendly behavior by platforms collecting data, much like a carbon tax. A platform applying the highest level of privacy protections would pay little or no tax.

The Collin & Colin report is now available in English. The provisions describing the proposed “privacy tax” can be found beginning on page 121:

5.2.1. Introducing a tax incentive for the collection and use of data

Data form the raw material that fuels the digital economy. They have a special value, that economic science and government statistics still have trouble capturing. They are produced by the “free labour” of Web users contributing to the output of digital economy companies that the tax system has a hard time measuring. This means that any special tax needs to be designed with regard to user-generated data and the use of these data. In the short term, without waiting to see how international negotiations on taxing profits turn out, we can introduce tax incentives based on companies’ use of the data that they collect through regular and systematic monitoring of the activity of the users of their applications.

The French government has asked the French National Digital Commission (CNN) to study the proposal.  The CNN has launched a number of hearings, including a hearing on May 17 devoted to the controversial privacy tax.  At the hearing, Nicolas Colin, co-author of the report, produced a helpful diagram to describe how the tax would work.  A recent report on the protection of French culture in the digital economy also recommended that the privacy tax be pursued by the government.