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Fear of American pop culture drives European smartphone, tablet taxes

European Smartphone, Tablet Tax Analysis

European governments are casting a baleful eye on the explosive smartphone and tablet growth. The problem for many Europeans lies in the way these devices promote vehicles for American entertainment — from Amazon and Netflix to Apple and Disney. The new proposal made by the president of France would slap a 1% tax on all smartphone and tablet retail sales, with a goal to protect “l’exception culturelle”. This exception is a concept France created in 1992 to defend protectionist measures aimed at preserving the cultural heritage of France.

Sweden is taking a different tack; it has already extended its annual, $320 television tax to encompass consumers who do not own a television, but possess a smartphone or a tablet. Swedish “Radiotjänst” tax collection agency is notorious for its hardball tactics to capture devious Swedes attempting to view television without paying the annual fee.

Legendary Radiotjänst stratagems include calling people from masked telephone numbers on Saturday evenings and sending tax collectors to listen for sounds of TV broadcasts outside the doors of Swedish citizens around 8 p.m. The new Swedish smartphone policy means that even if you do not own a television, you are assumed to be guilty of watching TV content of some sort as an owner of a smartphone or a tablet.

Both the French and the Swedish policies are underpinned by fear. There is a new horror of cultural imperialism pervading Europe: Netflix is expanding aggressively, Amazon is on a rampage, iTunes is bringing a wide selection of American television and film content to the heartlands of the European Union. In many European countries, the limited selection of American entertainment content by national broadcasters used to cap the amount of American entertainment consumed by innocent Europeans. But the new hardware and digital content distribution advances are flooding EU households with unlimited hours of Battlestar Galactica episodes and Final Destination sequels, corrupting millions of young minds.

The taxes collected by both the French initiative and the Swedish television/smartphone fee are going toward supporting domestic programming and arts. Whether any amount of money is going to lure euro teenagers away from Game of Thrones and Supernatural is far from clear.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.