French tech sector reacts to proposed gigabyte tax

The French National Assembly has adopted a proposed "gigabyte tax" as part of the 2027 finance bill, which would charge internet service providers a fee based on the amount of data they deliver to users. The tax, introduced as amendment I-1358 by socialist deputy Laurent Lhardit, would impose a cost of 0.055 euros per gigabyte of data used by French internet users.

Internet providers and major tech firms targeted

The measure would require internet service providers like Orange, SFR, Bouygues Telecom, and Free to track and report data usage to the tax authority. The amendment specifically targets large data traffic generators, including Google, Meta, Amazon, Netflix, and Akamai, which together account for roughly half of all data traffic in France.

Criticism from tech leaders and organizations

Xavier Niel, founder of Free and owner of Iliad, criticized the proposal on X, calling its supporters "ignorant and incompetent people" and accusing deputies of "knowing nothing else but to create new taxes." VideoLAN, the group behind the VLC media player, previously called the deputies "probably the most ignorant politicians on Earth" and estimated the tax could cost over one million euros annually.

Potential financial impact on tech companies

Octave Klaba, CEO of OVH, warned that the tax could cost his company up to 70 million euros annually. The tax would be limited to either 15% of revenue generated in France or 2% of global revenue, meaning the cost could range between 23 and 70 million euros per year. However, critics argue that the tax would be difficult to enforce due to the possibility of users bypassing it with proxies or virtual private networks.

Amendment passes with narrow support

The amendment was approved by the National Assembly with a narrow margin of 11 to 10, despite opposition from the government and the general rapporteur of the budget. It had previously been rejected in the finance committee in early October. The tax is still subject to further parliamentary review, including potential changes or removal during the Senate process or if the government adopts the budget without a vote.