Silicon Valley Runs Scared from France

J.J. Stranko
Jul 17, 2019 · 3 min read
Image for post
Image for post
It’s all about the euros

Emmanuel Macron has fashioned himself as many things: reformer, , Marine Le Pen blocker, Trump whisperer. But the one image that might stick with him long after he is out of the Elysée is Silicon Valley Saboteur, and the events of the last week show us just how hard Macron is willing to hit.

Seemingly out of nowhere, and in stark relief to the prevailing feelings in the American corporate world when the French elected a youthful, tech-savvy president,

What’s more, their fear comes not from the country’s massive market power or regulatory bite. It’s from a deeper fear that France has learned to use the formidable power of its state to hit tech companies where it hurts: their revenues.

This tax is important, because it would slam a door on the tax optimization strategies long used by companies like Google and Facebook to book profits in jurisdictional headquarters like Ireland, with no regard to where the revenue originates.

Even Washington is running scared

American politicians are spooked too, and their and paranoid than their responses to any of Europe’s many attempts to rein in Silicon Valley companies to date.

From the beginning, Macron has taken a methodical approach to big tech companies. His approach to Facebook serves as the best example of how he used the goodwill and optimism surrounding his rise to power to

Unlike many of his peers in Europe, Macron has approached this problem legislatively, making a priority of building a social and legislative case for limiting different powers of tech companies within France. He has also enlisted a diverse and respected group of legislators from across the governingLa Republique en Marche! party to commission informed and

This matters: throughout Europe, tech companies have largely faced regulatory scrutiny, and the occasional sniping from Parliaments like Britain’s. But it has not faced the combined power of a strong executive and a hostile legislature quite like it is facing in France right now.

Projecting France’s power far and wide

Unlike legal battles waged after executive decisions, or influence campaigns aimed at regulators, France’s legislation is far less likely to be swayed by the big lobbying machinery that tech companies have employed during similar battles in Europe. It doesn’t take a French constitutional scholar to understand where French courts will place the benefit of the doubt, particularly in response to legislative action.

Will other countries follow? Of course they will, and there’s evidence that France’s model may provide a very transferable template to governments across Europe and potentially beyond. On the back of France’s announcement, Austria, Italy, Spain and the UK announced that they were in the process of formulating similar tax regimes for revenue in their jurisdictions.

The Trump administration was quick to pick a fight with France on the proposed taxation. But with the mood in Washington quickly souring on the market power of Big Tech companies, it’s unlikely to be willing or able to push back when allies across the European Union begin to implement similar taxes.

President Macron, in turn, may have built a legacy that lasts far beyond his term, boosting France’s power and stature on one of the biggest geopolitical questions of our time.

The Diplomatic

Bringing the world closer to Silicon Valley: Commentary and…

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch

Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore

Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store