France Pushes EU to Regulate US Internet Companies

France plans to push for new Europe-wide regulations and tax rules on US Internet giants when European Union leaders meet next month to discuss the bloc's digital challenges. According to documents reviewed by The Wall Street Journal, France is calling on the European Commission, the bloc's executive arm, to draw up proposals by spring 2014 aimed at "establishing a tax regime for digital companies that ensures that the profits they make on the European market are subject to taxation and that the revenues are shared between the Member States, linking the tax base to the place where the profits are made."

France also wants to regulate the main platforms for Internet and digital applications—which would include Google, Apple, Amazon, and Facebook. European governments are increasingly alarmed by the growing might of US companies in the Internet economy. France, Germany and the UK have been pushing to change tax rules that allow US Web giants to avoid paying much corporate tax in Europe. Meanwhile EU countries also have assailed US Web companies for harvesting Europeans' data for profit without proper protections—concerns that alleged spying by the US National Security Agency has only amplified. Proposals like France's—including one to study taxing "data transfers outside Europe"—have long been sought by telecoms including France's Orange SA, Telefónica SA and Vodafone PLC, who say the "over the top" companies rely on the Internet for services while paying a fraction of the tax of telecommunications companies that build the networks. The telecoms compete against voice-over-IP services such as Microsoft's Skype and Google Talk.