Friday, January 8, 2010

New Google Tax??

Internet and e-commerce lawyers will be closely following a new Google tax proposed in France. Some in France propose taxing Google's lucrative internet pay per click advertising model to subsidize French copyright holders. The proposal has a number of procedural and technical legal snags. Aside from such legal technicalities, I am interested in the impact this may or may not have upon click fraud. That is because the tax is proposed as a per click tax upon Google ads. In other words, the taxable event occurs only when a Google ad is clicked upon. Will this encourage click fraud or provide an incentive for Google to implement stronger anti-click fraud measures to reduce possible tax liability?

Also, will Google bear the tax or will it simply pass the tax on to its advertisers by increasing keyword prices? As it stands, Google's advertisers would never know since keyword pricing is contained in a black box.

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