Concerns raised over French government’s proposed tax on music streaming services

The CNM was created in 2020 to support stakeholders across the music sector. French Senator Julien Bargeton – who has served in his role since 2017 – announced the proposal earlier this year. If passed, music streaming apps such as Spotify, YouTube Music, Deezer, and Apple Music will have a 1.75% tax rate imposed on their revenue.

The reason behind this was because Bargeton stated that France's music streaming outlets aren't as popular as in the US, UK and Scandinavian countries. Despite this claim, France is reported to be the sixth largest recorded music market in the world, with a 6.4% increase in revenue in 2022 making its total up to €920 million, as can be seen by data from the IFPI.

Antoine Monin, the Director General of Spotify France, called the tax a “monumental strategic error, which goes against the issues of economic, cultural and European technology”.

France proposed tax on music streaming services. It stirs controversy as @Spotify, @Apple, and @Deezer protest, warning of negative impacts on music industry and innovation.#France #musictaxeshttps://t.co/Tc3p2qHQje

— Music Plus: News + Features (@musicplusindia) December 19, 2023

“Honestly, Spotify will have the means to absorb this tax, but Spotify will disinvest in France and will invest in other markets. France does not encourage innovation and investment,” said Monin. He revealed that Spotify France pays 70% of its revenue to music rights holders, a 20% VAT, a 3% tax on digital services, a 5% tax on video services, “and now a streaming tax at 1.75%. How do you expect us to be able to operate in a market like France...France will no longer be a priority for Spotify.”

As reported by Music Business Worldwide, Monin discussed the negative impacts that this tax may have on European streaming services as opposed to their US-based counterparts such as Apple, Amazon, and YouTube: “The adoption of this tax is really a blow to the music sector, to innovation and to European independent platforms like Spotify or Deezer” according to a translated text of Monin’s interview with France Info.

Deezer CEO Jeronimo Folgueira agreed, stating “I am incredibly disappointed about the introduction of this tax, and although the intentions are good, this is the worst possible outcome that will backfire and have negative consequences for the entire music industry in France.

“With a flat rate for all music streaming companies, it is absolutely clear that it will have a worse impact for independent European music streaming companies like Deezer and Spotify, while the American tech giants can easily absorb the tax, and as result harming European and French tech sovereignty.”