Social Media data – the new tool to beat tax evasion in France

By: Alexandra Lee Page

Social media is often used as a personal expression of our everyday lifestyles, hobbies, and interests. But if you’re dodging taxes in France, you might want to consider dodging social media as well. Now, France will be using social media another way – to crack down on tax avoidance. Authorities are always looking for advantages in their battle against tax dodgers and thanks to a recent ruling, France’s government has earned another advantage.[1]

The French government recently developed plans to peruse through its citizens’ social media accounts to detect tax avoidance. On Friday, December 27, 2019, the country’s Constitutional Court recently told the French government “D’accord!” – or essentially gave the French government the green light to collect and monitor information that has been shared publicly on certain platforms as they try to detect possible offenders and/or offenses. Authorities can now check people’s posts, profile descriptions, and photos – particularly those suspected to be potential tax evaders – for evidence of possible fraud or wrongdoing, such as undeclared income or inconsistencies.[2]

Passed by the lower house of parliament in mid-December, the new rules are part of a broader law on tax changes.[3] As part of a three year experiment, these changes add to the state’s surveillance powers by letting the state collect masses of public data. Gerald Darmanin, the budget minister, took to social media itself via Twitter to express his appreciation for the court’s decision, saying “[t]he constitutional court has just ruled that this experiment conforms to the constitution.” “One more tool to fight fraud!”[4] On the other hand, such information collection sparked a public privacy outcry from several advocacy groups and members of parliament.

While it is certainly unwise to post content on social media that you intend to keep private, it’s unclear what content might exactly constitute evidence of tax evasion.[5] For example, what if you post a photo of a new car, smartphone, or other expensive item? Would that put you on a tax authority’s radar, or are there other red flags these groups would search for?[6] These are some of the concerns that have been echoed by La Commission Nationale de l’Informatique et des Libertés (“CNIL”), the French data watchdog group, who has issued written advice that the government has to show a great deal of ‘prudence’ over the plan as it could amount to the mass collection of data on a ‘significant scale,’ with information being automatically mined rather than gathered for specific, suspicious cases.[7] CNIL also commented that this massive collection of data could 'significantly change individuals’ behavior online, where they might not feel able to express themselves freely on the platforms in question'.[8] They also recognized that the government's aims were legitimate but the new policy would pose risks for individual freedoms.[9]

However, the court – who could have stopped the provision – acknowledged these concerns in its ruling on how the powers could threaten users’ privacy and freedom of expression. The court’s ruling imposed several conditions for the plans which would give tax authorities the power to check social media profiles and pictures.[10] For example, authorities would have to ensure that any password-protected content on social media platforms was off-limits. The court also provided that authorities would only be able to use public information pertaining to the person disclosing or sharing it online. The court also required regulators to closely monitor how such data was being exploited.

Minister Darmanin recently played down the significance of the move and the outcry, citing authorities in Britain and the United States had similar powers.[11] While reportedly speaking to Le Figaro, a newspaper and international media outlet, he commented that “if you say you’re not a fiscal resident in France and you keep posting pictures on Instagram from France, there might be an issue.[12] The Minister also told French TV last year that the tax office “will be able to see that if you have numerous pictures of yourself with a luxury car while you don’t have the means to own one, then maybe your cousin or your girlfriend has lent it to you, or maybe not.”[13]

According to the court, such powers to help prevent fraud will be reviewed at the end of the three year experiment. However, the French Parliament has yet to debate the proposal for a three-year trial during which the tax office's computer system is expected to collect information on peoples' lifestyles from social media accounts such as Facebook, Instagram, and Twitter, and also monitor their activity on sites such as eBay and the French site Le Bon Coin.[14] What will result out of this pilot project remains to be seen, especially in light of how giant tech companies such as Google and Facebook are harvesting social media data from its users around the world.

#France #tax #privacy #data #socialmedia #tech #Facebook #Instagram #Twitter #Darmanin

[1] Cohen Coberly, French court rules that authorities can scan social media posts for evidence of tax evasion, Techspot (Dec. 30, 2019, 12:49 PM), https://www.techspot.com/news/83358-french-court-rules-authorities-can-scan-social-media.html.

[2] Zoe Tidman, French government gets go ahead to trawl social media for tax cheats, Independent (Dec. 28, 2019), https://www.independent.co.uk/news/world/europe/tax-avoidance-social-media-privacy-france-information-gerald-darmanin-a9262696.html.

[3] French government to scan social media for tax cheats, BBC News (Dec. 27, 2019), https://www.bbc.com/news/world-europe-50930094.

[4] Gérald Darmanin (@GDarmanin), Twitter (Dec. 27, 2019, 12:55 PM), https://twitter.com/GDarmanin/status/1210620161222414336?s=20.

[5] See supra note 1.

[6] Id.

[7] Bhavya Sukheja, French Government Plans To Scan Social Media To Detect Tax Avoidance, Republic World (Dec. 28, 2019, 14:51 IST), https://www.republicworld.com/world-news/rest-of-the-world-news/french-government-plans-to-scan-social-media-to-detect-tax-avoidance.html.

[8] Id.

[9] Id.

[10] Décision n° 2019-796 DC du 27 décembre 2019 - Communiqué de presse, https://www.conseil-constitutionnel.fr/actualites/communique/decision-n-2019-796-dc-du-27-decembre-2019-communique-de-presse.

[11] Sarah White & Sophie Louet, French court clears social media tracking plan in tax crackdown, Thomson Reuters (Dec. 27, 2019, 2:03 PM), https://www.reuters.com/article/us-france-tech-surveillance/french-court-clears-social-media-tracking-plan-in-tax-crackdown-idUSKBN1YV1IB.

[12] See supra note 3; see also supra note 4.

[13] Aaron Kohn, French government allowed to scan social media over tax frauds, The West News (Dec. 28, 2019), https://thewestnews.com/french-government-allowed-to-scan-social-media-over-tax-frauds/938.

[14] See supra note 4.