PARIS (Reuters) - Swedish streaming service Spotify (NYSE:SPOT) on Thursday said it would increase its prices in France due to a new tax, which it argued would fail to accomplish its intended goal.
The government last year decided, starting form this year, to slap a 1.2% tax on the revenue streaming companies make in France to help finance music creation.
"While Spotify worked very hard to encourage the government to avoid adding this tax, unfortunately they decided to move forward," the Swedish group said in a statement.
"To put it bluntly, all French users will see their subscription plan fee go up. French users will now pay the highest subscriptions across the European Union."
It said it would announce the extent of the price increase at a later stage.
In its statement, Spotify said the tax was misguided and would not help music creation.
"It will simply come at the expense of listeners and create an additional middleman: the CNM," it said, referring to France's National Music Centre.
The tax, which the government hopes will raise about 15 million euros ($16.35 million) this year, will contribute to CNM's support for the music industry, including helping emerging artists and French artists trying to break through abroad, the government has said.
The head of the CNM, Jean-Philippe Thiellay, has rejected Spotify's criticism.
The tax "will not finance the CNM, whose operations are ensured by the state, but it will finance creation and diversity," he told France Musique radio in an interview last year. "100% of this tax will be re-injected into the sector."
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