Google chief in battle against EU 'news tax'

The head of Google was in France yesterday for talks with President François Hollande, trying to head off a movement in EU countries to force the search engine to pay a small charge each time it links its users to articles on news websites.

The German parliament passed such a law last month but has yet to implement it, and Mr Hollande is said to favour a similar "news tax" to help its financially struggling newspapers.

But Google wrote to French ministers last month threatening to eject French news websites from its search engine if news "royalties" are introduced. Its boss, Eric Schmidt, argues that a so-called "lex Google" – or levy on links to news items – would be bad for internet users but also damaging for the newspaper websites themselves. Without its links, news sites would be deprived of billions of "hits" a year, says Google.

French newspaper publishers say Google earns €1.2bn a year in advertising from France alone – six times the total revenues of all French news sites. Traffic on Google in the French language is boosted by users seeking updates on breaking news, the newspaper publishers say. This allows Google to charge higher advertising rates but none of the benefits go to the sites that do the "real work". This argument is rejected not only by Google but by internet-only news sites in France such as Rue 89 and Mediapart. They say a Google tax would reinforce, or preserve the domination of the "traditional" news media.

President Hollande is said, nonetheless, to favour the tax as a way of rescuing French national and regional newspapers whose readers and revenues are emigrating to the Net.

Mr Schmidt was also due to discuss with Mr Hollande complaints by the European Commission that Google fails to respect European laws on privacy.