Abstract:
France is considering launching a controversial Internet traffic tax, which would tax content providers based on the amount of data they transmit to French users. For every 1GB of data transmitted, they would have to pay 0.055 euros (5.5 euro cents). The proposal has passed the lower house of the French National Assembly with an extremely narrow majority, but there is still a long way to go before it officially becomes law.
This proposal, known as the "Digital Data Producer Tax", was proposed by French Socialist Party MP Laurent Lhardit and submitted for consideration as an amendment to the 2027 fiscal budget. On October 30, 2026, the French National Assembly voted on the proposal, and it was finally passed with 11 votes in favor and 10 votes against, with 14 other members abstaining from voting.
It is worth noting that there are 577 members of the French National Assembly, but only 35 actually participated in the vote this time, and only 21 of them actually voted for or against. This means that a tax policy that may affect the business models of large global Internet companies was passed by the House of Commons with only 11 votes in favor.
What is even more dramatic is that the French government and the parliamentary rapporteur responsible for budget review have previously clearly opposed this proposal.
According to the proposal design, Internet service providers will be responsible for data traffic statistics. Major French broadband operators such as Orange, SFR, Bouygues Telecom and Free are required to record how much data each content provider transmits to French users and submit relevant statistical results to the French tax authorities on a regular basis.
The content provider then pays a tax of €0.055 per GB. For enterprises that use content distribution networks (CDN), the calculation method is different. The relevant data will be calculated based on the total traffic transmitted out by the CDN network.
However, the proposal also sets a tax cap: the final tax paid by a company must not exceed 15% of its French operating income, or 2% of its global operating income.
The main target of this policy is obviously the world's large Internet platforms. The proposal cites data from French telecommunications regulator Arcep, saying that French Internet users receive about 200 billion GB of data traffic every year, of which five companies, Google, Meta, Amazon, Netflix and content distribution network operator Akamai, together contribute about half of the traffic.
The sponsors of the proposal estimate that this tax can bring about 10 billion euros in revenue to the French government every year.
But this number has also raised a lot of questions. David Amiel, the French Minister of Public Action and Finance, believes that it is not easy to accurately count Internet traffic according to corporate sources. It may be necessary to deploy special traffic sensors in the network or even measure it through user devices.
He also warned that the tax burden may not necessarily fall primarily on large U.S. technology companies, as proponents of the proposal say. Based on relevant traffic estimates, small content providers in France may bear a considerable share of the tax, and about half of the burden may fall on smaller companies, many of which originate from France.
VideoLAN, a French non-profit organization, has expressed strong concerns about this. This organization is the developer of the well-known open source player VLC, with more than 6 billion download records. VideoLAN said that if the tax is eventually implemented, it may have to pay more than 1 million euros per year.
This also exposes a noteworthy issue with the proposal: taxing based on data transmission volume may not necessarily accurately distinguish between large commercial platforms and small open source projects. Even if a free software project has no advertising revenue, it may still incur a considerable tax burden due to the large number of user downloads.
Another controversy is whether companies will pass on tax costs to other business partners.
Proposal sponsor Laurent Lhardit insists that ordinary users will not bear this cost directly, because platforms such as Facebook, Instagram and TikTok provide free services to users, and it is difficult for companies to directly charge additional fees to users.
But Philippe Juvin, the budget rapporteur of the French Parliament, expressed a different view. He believes that large Internet platforms have strong market bargaining power and are entirely likely to pass on new taxes to advertisers, application developers, merchants and other business partners.
Similar situations have occurred in France before. After France began to levy a 3% digital service tax in 2019, Amazon passed on the relevant costs to French market platform sellers and increased related service fees. Subsequently, Apple and Google also adjusted fees for French app developers and advertisers.
If calculated based on the standard of 0.055 euros per GB, the transmission cost of some large digital content will be considerable. For example, assuming that the download file of "Grand Theft Auto 6" (GTA 6) reaches the 210GB mentioned in the report in the future, based on this tax rate alone, the publisher may incur a tax of 11.55 euros for each copy of the complete game transferred to French users.
For video platforms, cloud storage services, game publishers and software distribution platforms, this data-based taxation model could have widespread implications. Especially high-definition videos, game installation packages and large software updates often require the transmission of tens or even hundreds of GB of data.
However, this proposal is still only an amendment in the review process of France's 2027 budget and does not mean that the tax has officially taken effect.
Next, it will also need to pass the follow-up review process of the French budget and face scrutiny by the Senate. Since the Senate is currently dominated by Republicans, outsiders believe there is greater uncertainty about the possibility of the proposal gaining support there.
In addition, the French government may also, in accordance with Article 49.3 of the Constitution, bypass parliament for a final vote on the budget under certain conditions. In this case, the government can decide to keep or delete the relevant amendments, so even if the proposal has passed the House of Commons, it may still be excluded from the final budget text.
This policy reflects France’s new attempt at taxing the digital economy. The traditional digital service tax mainly targets commercial income such as advertising revenue and platform transaction revenue of large technology companies. However, this proposal directly uses Internet data traffic as the basis for tax calculation.
If ultimately implemented, France will try to turn Internet traffic itself into an economic activity subject to tax. But its actual effectiveness, especially whether it can avoid passing costs on to advertisers, developers and local small Internet companies, is still highly controversial.
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