Macron’s Love Affair With Big Tech Ends With Call for More Laws

(Bloomberg) -- Emmanuel Macron's tech minister signaled that the days of seeing eye-to-eye with digital giants are over.

The French president has levied a tax on global technology behemoths to make them contribute to state coffers like their brick-and-mortar peers. Now, Macron -- who posed with two Apple iPhones on his first official portrait after taking office -- wants more regulations for companies like Facebook Inc., Alphabet Inc.‘s Google and Amazon.com Inc.

“The body language is changing,” Cedric O, the French minister for digital affairs, said in an interview at Macron's former office overlooking the Seine. “France aims to be one of the leading countries in terms of regulation and in knowing the tech environment. We understand them but we're not lenient.”

O is on a week-long tour in the U.S., starting Monday, covering Washington, San Francisco and Los Angeles, to press home his boss's message. Macron wants stricter control over major online players and doesn't rule out a push for splitting them.

Macron's toughening stance coincides with the new European Commission's efforts to take greater control over the region's digital landscape. The French president has sent most of his ideas for increasing regulation to the new EU Commission, with Ursula von der Leyen at its helm, and to competition commissioner Margrethe Vestager, who has increased oversight of tech firms and is known for slapping them with giant fines.

Tech-Friendly Credentials

Before taking office, Macron spent a great deal of time burnishing his tech-friendly credentials, attending events like the Las Vegas' Consumer Electronics Show as economy minister to promote the French startup ecosystem. As president, he has invited top executives of U.S. tech giants like Facebook's Mark Zuckerberg to Paris.

His new stance comes after a raft of fines led by the European Union against the likes of Facebook and Google, and a concerted push to improve the prospects of France's local tech scene.

Efforts to implement new rules may resonate with U.S. presidential candidates like Elizabeth Warren, but President Donald Trump's has railed against French plans to tax U.S. tech firms.

“These are American companies, and whether you like it or not they're great big American companies,” Trump has said. “I'm not happy with the digital tax.”

U.S. Talks

The new tax, retroactively applied from January, affects companies with at least 750 million euros ($825 million) in global revenue and digital sales of 25 million euros in France. While most of the roughly 30 businesses affected are American, the list also includes Chinese, German, British and French companies.

The U.S. Trade Representative is expected to say Monday if it will take retaliatory actions after an investigation into whether the tax is a measure against the country's companies.

O said he didn't expect tariffs, and that the tax will be part of the broader regulation talks he will hold with the U.S.'s chief technology officer, Michael Kratsios, in Washington on Monday.

He may be asked to explain France's new media legislation, expected to be presented this month in cabinet, that aims to step up regulation for video-on-demand platforms such as Netflix, Amazon and Disney and increases oversight of content media such as YouTube. Final details of the bill weren't available as of Dec. 2.

New tech regulations could also include making them inter-operable with other platforms to give customers the freedom to switch operators, reining in an over-dominant platform and special regulation for hate speech, O said.

The 36-year-old minister, who's meeting with Eric Schmidt, Google's former chief executive officer, and visiting the offices of Snap Inc. in Los Angeles, said rules “can't be a sector-by-sector.”

“What systemic regulation do we want? If you start with taxes, and then Uber, and then labor laws, Facebook on privacy, then Google on health data, you're constantly catching-up and it's never ending,” he said.

To contact the reporter on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Vidya Root

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