The French parliament has passed a law on taxing major US digital companies, including Google and Facebook.
The document was greenlighted on Thursday by a simple show of hands in the French Senate, after being passed by the National Assembly.
The move comes after US Trade Representative Robert Lighthizer announced the beginning of a probe into France's planned tax on tech giants, adding that Washington is very concerned that the tax would "unfairly target American companies".
He said in a statement that “the President has directed that we investigate the effects of this legislation and determine whether it is discriminatory or unreasonable and burdens or restricts United States commerce”.
Lighthizer will reportedly be given up to a year to look into whether the French plan would hurt US technology firms, and suggest retaliatory measures.
Last month, he described the tax as something “that is geared toward hitting American companies disproportionately”, saying that he thinks that “it’s something the United States has got to take strong action on”.
Republican Senate Finance Committee Chairman Chuck Grassley and Ron Wyden, the senior Democrat on the panel, for their part, hailed the investigation.
“The digital services tax that France and other European countries are pursuing is clearly protectionist and unfairly targets American companies in a way that will cost US jobs and harm American workers”, they pointed out in a joint statement.
French Economy Minister Bruno Le Maire, in turn, warned against “threats” to grapple with tax-related bilateral disputes.
"Between allies, I believe we can and must resolve our differences in another way than through threats”, he said during his address to the French Senate in the run-up to the vote.
He touted France as “a sovereign state” which he stressed “alone decides on its taxation mechanisms and it will continue to do so”.
The new tax will apply to the French revenues of approximately 30 major companies, most of which are US-based. Le Maire suggested that the tax will raise roughly 500 million euros ($565 million) per year.
The legislation is referred to as the GAFA tax, which is an acronym for Google, Apple, Facebook and Amazon. It targets digital companies with global annual sales of more than 750 million euros ($849 million) and sales in France of at least 25 million euros.
"If these two criteria are not met, the taxes will not be imposed", Le Maire said.
He added that the new tax will cover areas such as advertising, websites, and the resale of private data. According to Le Maire, "there will also be a French firm and other originally French firms that were later bought by big foreign companies".
