France wants to tap into social platforms to catch tax cheats, Bloomberg reports, and it may need Facebook’s (FB) help to do that. Facebook’s namesake social network held 80% of France’s social media market in September. Pinterest (PINS) placed a distant second with 11% of the market, and Twitter (TWTR) was third with 4.3%.
France wants social media data to fight tax fraud
Bloomberg reports that French lawmakers will begin discussing the budget law next week. The law will seek to empower the country’s tax authority to use social media data to catch tax cheats.
How will Facebook react to France’s demand to access its users’ data? Privacy and other concerns will surely complicate granting France access to the information.
France has vowed to block Facebook’s Libra cryptocurrency project. However, Facebook counts on projects like Libra to boost its advertising business and diversify its revenue. Facebook is working with more than two dozen associates to develop Libra.
Facebook hopes Libra will enable more small businesses to become advertisers on its platforms. Although there are currently over 90 million small businesses with a presence on Facebook, very few advertise on the platform. Facebook currently has about 7.0 million active advertisers on its namesake network and Instagram. Therefore, enabling more small businesses to become Facebook advertisers offers huge potential. Through Libra, Facebook also hopes to expand its financial services business through its new subsidiary, Calibra.
Calibra could reduce Facebook’s dependence on advertising. The company derives nearly all of its revenue from the increasingly challenging market.
France poses another challenge for Facebook
Moreover, France has passed a digital service tax despite opposition from Facebook, Google, and other big tech companies. The country’s plan to tap into Facebook and other social networks to crack down on tax cheats comes as it struggles with a budget deficit. The French government has planned more than $11 billion in tax cuts to stimulate economic growth.