Google Inc. (NASDAQ:GOOG) has very deep financial pockets as a global technology company, and apparently France is well aware of it, and it is making a push to collect its fair share of that money – either through the public sector or the private. While either way may be a long shot, it may be more likely that the public sector will be more successful.
Google Inc. (NASDAQ:GOOG) is making very few friends in Europe, and it apparently won’t be sending many Christmas cards to France. There has been a huge issue with Google Search choosing its products and services and putting them high on its search results, over many domestic results in France, and Google Inc. (NASDAQ:GOOG) has been criticized for showing headlines and short snippets of news stories from French newspapers in its search results. Because of that, the French media think they lose out on some revenue when Google Inc. (NASDAQ:GOOG) provides these snippets in their search results, which don’t encourage users to click on the headlines and use the news sites. As the French media consider the snippets a form of copyright infringement, they are now leading a push to force Google Inc. (NASDAQ:GOOG) to pay the media to have access to the articles in its search results.
By a show of hands, who thinks Google Inc. (NASDAQ:GOOG) will pay these outlets for access to their links for their search results?
Anyone? Anyone? In the back?
But while Google Inc. (NASDAQ:GOOG) may be in the clear on that front, it is being attacked on another flank now, as a report is circulating – which Google Inc. (GOOG) is denying – that the France Tax Administration has sent a tax bill to the company in the amount of 1 billion euros for selling advertising to rench companies from its headquarters in Ireland, where corporate taxes are the lowest in the EU.
In the EU, companies can pay taxes in the country where the headquarters is located, and that covers taxes in the full EU, but the report states that France is making a claim that Google Inc. (NASDAQ:GOOG) should be paying taxes on advertising revenue in France. Google said it has not received any letter of assessment from the tax authority in France, but did acknowledge having conversations with the authority without going into detail.
Will any of this matter for Google Inc. (NASDAQ:GOOG)? In the wake of the disappointing earnings report, can Google Inc. (GOOG) and its investors – like billionaire fund manager Julian Robertson of Tiger Management – afford to take a financial hit?