China’s Social Credit System And France Levies Tax On Internet Giants

On Episode 436 of the Waves of Tech, we are diving into the international side of technology.  We learned this week that the French government is set to decide on implementing a new tax on internet giants that profit on targeted digital advertising and re-selling of personal user data.  The Chinese government has a system in place – the social credit score – that ranks individual citizens and that scores provides certain freedoms such as travel, mortgages, and choice of school.  Retail stores around the United States and abroad continue to close but it is for many more reasons that simply Amazon and the online shopping spike.  Thanks for tuning in and don’t forget to keep on techin’.

The French Government Seeks New Taxation

News broke from Reuters this week that the French Finance Minister Bruno Le Maire would be putting forth a proposal for adding a 3% tax on digital internet giants.  These large internet companies would need to meet certain revenue thresholds before the tax goes into effect. The French idea is focused on companies re-selling personal data and targeted digital advertising.

  • Nearly 30 American companies would fit into the category as defined by the bill
  • Spanish, British, German, Chinese, and French companies would be captured too
  • Internet giants pay 14% less tax than European small-and-medium sized companies
  • The Minister has described this as a matter of fiscal justice in today’s environment

The Chinese System of Ranking Their Citizens

Wait just one minute.  Did you have any idea that the Chinese government has a system in place that scores and ranks their citizens based on their interactions with others, their personal spending habits, and their ability to pay bills regularly?  We had no idea this was happening. Full implementation of the Chinese social credit system is set for early 2020.

  • Citizen rankings determine schools that your children may attend in the future
  • The overall score may be the reason that you have a good or poor mortgage payment
  • China denied the travel 23 million times in 2018 for those with a poor social score
  • As the Chinese police state continues to grow, 1.3 billion people will be controlled

Why Are Retail Stores Closing by the Thousands

Take a look at the list – Payless ShoeSource, KMart, Shopko, Kohl’s, Gymboree, Sears, Charlotte Russe, Lowe’s, and Macy’s.  Along with many others, these companies are closing down close to 4,000 brick and mortar storefronts in 2019. It’s easy to make online shopping and Amazon the scapegoat in closures.  Let’s think about this differently though.

  • Many of these companies have long standing financial and structural issues
  • Fashion and apparel companies are losing due to poor product quality and value
  • Online shopping has created convenience but is not the only reason retailers fail
  • Some close to improve profitability against an overly saturated retail market

Upcoming Events and Coverage

A few administrative notes related to some of the upcoming events that we will be covering over the next few months.  Dave is set to cover CUE in Palm Springs, an educational and technology conference with over 8,000 attendees and hundreds of exhibitors.  Steve is heading to NAB in Las Vegas to see the latest in radio and television broadcasting.  We are also looking forward to covering Podcast Movement in Florida and celebrating International Podcast Day in September.

Resources & Links

New French tax proposed on digital revenue
France targets local targeted ads and re-selling of personal data
China’s Social Credit System
China bans millions from planes & trains due to social credit
Retail continuing to close stores


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