A day after the Trump administration announced plans to investigate whether France’s planned digital tax amounts to unfair trade practices by discriminating against US companies, the French government has passed the laws. On July 11, the Senate passed the bill creating a 3% tax on big tech companies providing services to French users. It could affect US giants Apple, Facebook, Amazon and Google.
The US investigation into France’s new rules, announced July 10, will be conducted by US Trade Representative Robert Lighthizer. It will be a 301 probe, the same kind that led to tariffs being placed on China last year.
“The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies,” Lighthizer said in a statement Wednesday. “The president has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce.”
A trade group that represents Microsoft, Google, Facebook and Amazon called the US investigation “an important step in exercising American leadership to stem the tide of new discriminatory taxes across Europe.”
The US will be holding its first hearing on the investigation on Aug. 19, Reuters reported Friday.
The new French law affects companies that make at least €750 million in revenue worldwide — around $844 million — as well as €25 million in digital sales in France. Over the past decade, the French government and the European Union have been investigating the back taxes of Apple, Google, Amazon and Facebook to determine whether they’re paying enough.
Bruno Le Maire, the French finance minister who introduced the new legislation, had previously threatened to start taxing big tech companies at a national level if the EU couldn’t agree on a joint tax initiative for digital revenues.
At the end of last year, Apple reportedly agreed to pay France nearly $600 million in back taxes.
Originally published July 11, 12:29 p.m. PT.
Update, July 12: Adds info on first hearing.