EC rules French telecoms tax ‘illegal’

29 Jan 2010

The European Commission (EC) has initiated infringement proceedings against the French government, saying its so-called ‘telecoms tax’ on operators to offset the ending of advertising on public access TV channels ‘constitutes an administrative charge that is incompatible with European law’. Viviane Reding, Member of the European Commission, responsible for Information Society and Media, said: ‘I have expressed doubts about the ‘telecoms tax’ on a number of occasions … Not only does this new tax on operators seem incompatible with the European rules, it also concerns a sector that is now one of the major drivers of economic growth. Moreover, there is a serious risk that it will be passed on to customers at a time when we are in fact trying to reduce their bills by cutting termination rates and the costs of mobile phone calls, data transfer and text message roaming.’

Paris introduced the new tax in March 2009, covering audiovisual communication and the new public television service. The annual revenue from the new tax for the Treasury is estimated at EUR400 million (USD560 million). The French government now has two months to respond to the EC’s ruling.