France's Data-Per-Gigabyte Tax Could Drain VLC and Other Non-Profits, Not Just Big Tech

France's legislative body has endorsed a novel "internet tax" that imposes charges on organizations based on the volume of data they transmit to people accessing the internet through French providers. The stated goal is to extract greater financial contributions from major technology corporations. However, the law's broad language means it could also affect non-commercial entities, including the creators of free software.

The Tax Framework

Amendment I-1358, introduced by Laurent Lhardit as part of France's 2027 finance bill, establishes a levy on "producers of digital data" set at €0.055 for each gigabyte transmitted to subscribers of French internet services. Telecom regulator Arcep and tax authority DGFiP would oversee the measurement and collection process, which focuses solely on data volume regardless of content or destination.

The amendment caps the tax at either 15% of a company's French revenue or 2% of its worldwide revenue, though the text uses "or" without clarifying which threshold applies when both limits differ.

Revenue Projections

According to the amendment, Arcep estimates that 200 billion gigabytes flow annually to French internet subscribers. The government projects the tax would generate €10 billion yearly. The measure identifies Google, Meta, Amazon, Netflix and Akamai as responsible for approximately half of this traffic.

Despite arguments from European telecommunications operators that they should receive compensation for network infrastructure, the revenue would flow directly to the state treasury. The amendment's justification emphasizes tax equity between domestic enterprises and international digital corporations, alongside environmental considerations related to data compression.

The VLC Problem

Under this framework, one gigabyte of open-source software incurs the same tax as one gigabyte of streaming video. VideoLAN, the French nonprofit organization maintaining VLC media player, publicly objected to the proposal, stating the tax would impose costs exceeding €1 million annually on the organization.

So, the French socialists, and Parliament members just voted a tax, that they don't understand, which would cost VideoLAN more than 1 million euro per year. They are probably the most clueless politician on Earth? And they claim they want technological sovereignty……

VideoLAN on X, October 30, 2026

Lhardit responded by asserting that the revenue cap would shield VideoLAN from excessive liability. He also contended that the tax could not be transferred to users of free platforms like Facebook, Instagram or TikTok.

You have no idea what you are talking about. What you said about Facebook and Insta and other social networks are not targeted because they are free, means you don't understand the basics of economy. You don't understand the difference between Revenue and Profit.

VideoLAN on X, October 30, 2026

While the revenue cap may reduce what a low-income nonprofit owes, the amendment contains no explicit exemption for associations, free software or free content. VideoLAN's €1 million projection represents the potential liability before applying the cap, and the ambiguous language makes the actual figure impossible to determine with certainty.

VLC is not isolated in its concerns. OVHcloud founder Octave Klaba estimated his company's potential annual exposure at roughly €70 million. Free Telecom's Xavier Niel criticized the legislation's authors as "ignares incompétents." Notably, both are French enterprises, not the American technology giants the bill ostensibly targets.

Who Bears the Real Cost

While headlines about taxing Big Tech appeal to voters, the economic reality differs. Netflix will likely respond by increasing subscription fees rather than absorbing the cost. Facebook generates revenue through advertising, not direct user payments, meaning the platform's financial burden ultimately reflects the distinction between revenue and profit that VideoLAN highlighted.

The outcome leaves government with additional tax revenue, major technology companies protecting their profit margins, and consumers paying higher prices. Nonprofits like VLC, which lack pricing mechanisms to pass costs forward, face genuine financial hardship.

The amendment's vague language creates additional risks. If enacted, it could establish a precedent that other European nations might emulate. The legislation lacks clear definitions of which entities qualify as "internet companies," resembling the regulatory ambiguity that plagued the General Data Protection Regulation.