The French really aren’t a happy bunch at the minute, or at least they’re not when it comes to American tech firms. Having spent the best part of a year chasing Google for its alleged anticompetitive behavior and its Google News service, it’s now turned its attention Microsoft.
This time round it’s the turn of ARCEP, a French regulator, whose bone of contention with the Redmond-based software giant has to do with Skype. According to officials, Microsoft has repeatedly ignored demands to register its VoIP service as a telecommunications operator in order to comply with French law. Given what this move would entail – the integration of a system that allows French law enforcement to wiretap Skype and route emergency calls through the service – Microsoft has steadfastly refused to comply since ARCEP issued its demand last year.
Unfortunately for Microsoft, ARCEP doesn’t seem to want to take “no” for an answer. In order to force Microsoft into action, the regulator has just contacted local prosecutors to exert more pressure on the US company.
“It’s about the fact that when you act as a French operator that you have to register as an operator,” insisted ARCEP spokesperson Jean Francois Hernandez. He added that as soon as Skype registers as a local operator, it would then be compelled to declare its revenues to the tax man, something that would see it subject to paying local taxes.
It seems that these taxes are the real crux of the issue – Microsoft naturally wants to avoid paying, while the authorities obviously want to milk them for as much as possible. Sadly for Skype, which is against the move, it’s not only the authorities that are applying pressure but also rival French telecommunications operators.
One of these, France Telecom, claims that Skype and other VoIP services are given an “unfair advantage” as they offer basically the same services without having to cough up any tax. By forcing Skype to operate as a telecommunications firm, this would lead to a “balanced regulatory environment” that was fairer for all.
It looks likely that we’ll be in for yet another protracted legal struggle, as Microsoft is determined not to comply. The company insists that under French law Skype cannot be designated as a “provider of electronic communications services”, although it is willing to work with ARCEP to resolve the issue. To be fair, Microsoft does have a pretty strong case, as VoIP services are not considered to be telecommunications services under EU law, although ARCEP is challenging that as well.