Facebook Inc. (FB) Data Collection Should be Taxed: France

Facebook Inc. (NASDAQ:FB) has been involved in a number of issues regarding privacy and its data-collection processes in Europe, and now that could cost Facebook, Google Inc. (NASDAQ:GOOG) and others Web sites more money for continuing to collect that information, if France follows through on a new report.

France President Francois Hollande is using information from a recently published report that he commissioned that suggests that the information that Web sites collect from users is considered “raw materials” – similar to wood for houses or metal for autos – because companies like Facebook Inc. (NASDAQ:FB) and others gain most of their billions of dollars in revenue from advertising, which stems from the personal information gathered by users. There is an argument in the report, as covered by the New York Times, that as the data being collected is “raw material,” that the users of these Web sites who supply that information are essentially unpaid employees of the companies, providing the “raw material” for the companies so they can make their money with that information.

The idea of taxing companies like Facebook Inc. (NASDAQ:FB) for the data they collect is expects to serve as the way that companies “pay” their users for providing those companies with the information they use to get their quarterly revenue numbers. For the most part, users can access Facebook and Google Inc. (NASDAQ:GOOG) for free, but taxing those entities for the information they collect may force those companies, in return, to begin charging users for access in order to recoup some of their losses. And that, it is argued, may crimp the growth of these companies in Europe and may even shrink their influence and impact – which or course then may affect their bottom lines and their stock prices.

How has Facebook’s stock been faring so far this year?

Facebook closed last week at $29.66 a share, down 6.5 percent on the week. However, the stock is up nearly 11.5 percent in the calendar year.

As an investor or potential investor, what do you think about this report and this idea of considering private information “raw material” for Facebook inc. (NASDAQ:FB)? Do you think this will become law, and how do you see it affecting tech companies in the future? Give us your thoughts in the comments section below.

DISCLOSURE: I hold no positions in any stock mentioned.

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