Original URL: http://www.theregister.co.uk/2013/02/04/google_link_tax_french_media/

Google frenches Gallic media with €60m and some 'help'

Have some cash and forget all about that nasty link tax

By Anna Leach

Posted in Financial News, 4th February 2013 17:27 GMT

Eric Schmidt, chairman of Google has dropped a little sweetener to the French media as Google's legal tussle over "a link tax" rumbles on.

Schmidt announced a 60m euro fund for "innovation" in French journalism and "help" for French publishers using Google's advertising tools, in a joint announcement with the French President Francois Hollande on Friday. Schmidt blogged:

First, Google has agreed to create a €60 million Digital Publishing Innovation Fund to help support transformative digital publishing initiatives for French readers.

Second, Google will deepen our partnership with French publishers to help increase their online revenues using our advertising technology.

Google faced pressure from the French government to pay a link tax for excerpting and linking to articles by French newspapers on search results pages, pages on which Google take all the ad revenue. Google have flatly resisted any suggestions of a link tax but looks like they've decided to charm rather than fight their way out of the impasse by scattering some money around.

The new plan will funnel a little Google cash towards troubled French media outlets without Google having to concede the principle of a link tax, a precedent that would be disastrous for the ad giant's business model.

The deal seems to have pacified France's government - Fleur Pellerin, France's Minister for Small and Medium Enterprise and the Digital Economy, tweeted that she was happy with the historic agreement which was a good example of constructive integration.

Pellerin said that the 60 million euros would finance modernisation projects and digital transition for the French media organisations.

Google faces pressure on the same issue from the German government.

Google faces several legislative challenges in France. Disputes recently have included whether sites that create a lot of traffic should subsidise network infrastructure, and whether web companies should be charged when they take user information - as a means to claw back tax revenue from the American companies. ®