PARIS (Reuters) - France could start taxing Internet advertising revenues from online giants such as Google, using the funds to support creative industries that have been hit by the digital revolution, a newspaper reported on Thursday.

A photo of the Google Inc. logo is shown on a computer screen in San Francisco, California July 16, 2009. France could start taxing Internet advertising revenues from online giants such as Google, using the funds to support creative industries that have been hit by the digital revolution, a newspaper reported. (REUTERS/Robert Galbraith/Files)

The proposal, put forward in a government-commissioned survey, is France's latest challenge to the virtual free-for-all for Internet content. The country has previously caused controversy with some of the world's harshest laws on online piracy.

The levy, which would also apply to other operators such as MSN and Yahoo, would put an end to "enrichment without any limit or compensation," newspaper Liberation quoted Guillaume Cerutti, one of the authors of the report, as saying.

It would apply even if the operator had its offices outside France, as long as the Internet users who click on ad banners or sponsored links are here, the paper said.

President Nicolas Sarkozy has repeatedly tried to present himself as a defender of France's cultural heritage in the digital age, most recently calling for public projects to rival Google's plans for a massive online library.

Critics point out the issue of compensating authors is a complex one, given that many of the songs, films and texts published online these days are created for free by amateurs outside the cultural establishment.

Cerutti, president of Sotheby's in France, drew up the report together with Jacques Toubon, a former minister, and Patrick Zelnik, a former music executive who has among others produced the songs of France's first lady, Carla Bruni-Sarkozy.

The authors also suggest taxing Internet service providers to raise tens of millions of euros that would be invested in developing the online music business and other creative sectors.

For example, they propose offering government-subsidised online subscriptions and expanding online publishing platforms, said Liberation, which obtained a copy of the report.

In recent months, operators and users have faced increased pressure to pay for content from online newspapers to films and books. Under France's new Internet piracy law, repeat illegal downloaders will be disconnected and fined.

The new report was handed into the Culture Ministry earlier this week. It was not immediately clear if the government has a precise timetable to act on it.

(Editing by Matthew Jones)

Copyright © 2013 Reuters

• Malaysia tycoon Vincent Tan plans IPO of football club Cardiff City
• Google, like Facebook, in talks to buy Waze for about US$1bil
• Crown selling entire 10% in rival Echo, partly owned by Genting(Update)
• First edition of 'Great Gatsby' to be sold at auction, can fetch US$150,000
• Malaysia leads the way in Basel III debt
• Markets face rough summer ride as Fed pullback feared
• Wall Street sags, HP hits 52-week high
• Commodities trader sues BP, Shell others for alleged oil price fixing
• Billionaire Icahn seeks up to US$7bil for Dell bid
• Google faces new federal antitrust probe
• Goldman Sachs unveils checks on conflicts in bid to fix tarnished image
• Air Asia's Tony Fernandes to ‘fire up’ investors
• Maybank bullish on growth, to expand regionally under new leadership
• Khazanah appoints Nor Mohamed deputy chairman
• Lafarge Malayan Cement to finalise next expansion plans by August

• London's Heathrow airport closed after emergency landing
• Far East quake felt in Moscow, tsunami warning lifted
• Police make new arrests in London soldier killing
• Britain's press demands jailing of Islamist preacher
• Tsunami warning in Russia's Far East after 8.2 quake
• US bridge collapse sends cars, people into river
• Strong quake strikes off Tonga
• Jury fails to decide on US murderer death sentence
• One killed in Brazil giant fuel depot blaze

• Kingston leads, McIlroy in Wentworth woe
• LPGA plans 12-hole rounds in water-logged Bahamas
• Ryan Palmer sizzles with 62 to seize lead at Colonial
• Kelly overcomes scare to clinch title in KLGCC
• Time to make amends Garcia wants to meet Woods to defuse racist row
• American Johnson back to defend Colonial crown
• Rain dampens debut of LPGA Bahamas event
• Tianlang adds another US event to schedule
• Clock ticking for next golden generation
• Nadal wants to create history at Roland Garros
• Serena out to tame French Open demons
• Zheng Jie stuns Wozniacki in Brussels
• British Open: Ramy Ashour racks up 38th successive win
• Nicol David sails into quarter-finals of British Open in 35 minutes
• BAM must stop rewarding mediocrity or be doomed

• Please wait.

• Air Asia's Tony Fernandes to ‘fire up’ investors
• Singapore GDP growth surprises, beats economists’ forecast of contraction
• KL car number plates to bear ‘W1A’
• Tian, Tamrin and Haris released after remand denied (updated)
• Inventions a-plenty, but no real innovation
• Robber shot dead after attacking out-of-uniform cop with meat cleaver
• Malaysia leads the way in Basel III debt
• Three held over May 13 statements
• Fernandes does his first firing in Apprentice Asia
• Wall Street sags, HP hits 52-week high