United States launches Section 301 investigation into French digital services tax

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Lighthizer said the United States is very concerned that such a levy would unfairly with American companies.

The law, which has been already dubbed the GAFA (Google, Apple, Facebook and Amazon) tax, has angered Washington, which had raised concerns that the tax would "unfairly target American companies".

The Trump administration has promised an investigation after French lawmakers approved a bill Thursday to impose a tax on large technology firms that provide services in France.

Although the USA could target France with tariffs directly in response to the proposed tax, the US imposing tariffs on France would trigger a trade war with the whole of the European Union.

Google on Wednesday defended its global tax payments and voiced support for a new "comprehensive and multilateral agreement" on tax, rather than "discriminatory unilateral taxes".

The proposed tax, of 3% of total annual revenue, would apply to companies that generate revenue of at least 750 million euros globally and 25 million euros in France from such services.

"And this will continue to be the case", said Bruno Le Maire Finance Minister of France in a statement.

The new measure is expected to bring in some 182 million euros a year which will be invested in greener transport infrastructures, notably rail, she said.

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Olivia Ciampi, 15, of Rockaway, Queens, who joined the throng with her mother, agreed equal pay for the team was long overdue. However, that would still be far less than the $440 million allotted for male players in the 2022 World Cup.

"Digital giants pay 14 percent less tax than small- and medium-sized European companies", he added.

The U.S. probe could lead to tariffs or other penalties. "Once again, I think that threats, sanctions, are not the good way of sorting out difficulties that we might have between the USA and France".

France pushed ahead with the tax after European Union countries failed to agree a levy across the bloc in the face of opposition from Ireland and some Nordic countries. The so-called 301 investigation is the same tool President Donald Trump used to impose tariffs on Chinese goods because of the country's alleged theft of intellectual property. It's for that reason that the United States government has ordered an inquiry into the new tax, with the potential to implement tariffs on French goods in retaliation.

The European Commission has estimated that multinational digital companies with investments in the EU are on average taxed at a rate 14 percentage points below that of other firms.

The criteria will cover roughly 30 major tech companies, in which a majority belongs to the U.S.

The US administration took a strong stance past year against the EU's own digital tax plans, calling European proposals to tax tech giants discriminatory "against US companies".

"France is a sovereign country".

It should be noted that France has pledged to drop its tax as soon as an global agreement is reached at the Organisation for Economic Cooperation and Development, when it finally overhauls decades-old cross-border tax rules for the digital era.

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