Who are the GAFA?

Acronym commonly used since the mid-2000s, GAFA is none other than the contraction of the names of the four web giants: Google, Amazon, Facebook and Apple. Sometimes, some add the M from Microsoft.

Who are the GAFA?

Acronym commonly used since the mid-2000s, GAFA is none other than the contraction of the names of the four web giants: Google, Amazon, Facebook and Apple. Sometimes, some add the M from Microsoft. These start-ups, most of them created in garages, are now among the world's largest market capitalisations.

A significant weight and an alarming concentration

Despite a still recent history (21 years for Google and 15 years for Facebook), the GAFA already has a significant weight on the global economy. As proof, the capitalization of each of them is close to US$1 trillion. By way of comparison, these web giants are better valued than the GDP of some developed countries such as Great Britain or France. These gigantic figures are none other than the direct consequence of a quasi-monopoly situation and/or a concentration strategy.

For example, Google concentrates more than 90 requests made on the Internet in the world. To extend its development and hegemony, it has bought YouTube and other companies.

An illusion of free access versus marketing profiling

It is well known that a monopoly company is free to set a higher selling price for its products and services and thus make huge profits. Yet some companies offer free use, such as Google and Facebook. The latter position themselves more as an interface than as a seller. In reality, the fact that their services are free is only an illusion. They are paid from the collection, analysis and resale of user data.

They refine their consumer profiles in order to sell them at a high price. They can even impose their own products and services at the top of the gondola and stifle competition at the same time.

Tax optimisation against the mass interest

Like any business, GAFA's aim is to maximise their profits. This leads them to adopt a policy of tax optimization. Also, their exceptional financial health does not benefit the economy as a whole and does not contribute to building much more inclusive societies. As a result, the majority of the population does not benefit from technological revolutions. For example, they have decided to settle in Ireland rather than in France, England and so on.

This allows them to benefit from a tax rate of 125 u instead of 31%. Dematerialization works in their favor by making it more difficult to localize sales.

Taxation of GAFA in response to tax dumping practices

Some voices have already been raised calling for the regulation of GAFA activities. Others have even called for their dismemberment on the grounds of abusive dominance. Unfortunately, it is difficult to implement such a measure because of globalisation and the fluid nature of digital activities. In order to remedy this fiscal dumping, France has opted for the taxation of GAFA. However, this 3% digital tax on large technology companies is not yet unanimously accepted in Europe for fear of the reaction of the United States and the departure of these companies to other countries with more attractive tax regimes.