Pushing France Onto the Digital Stage

http://www.nytimes.com/2013/01/17/technology/17iht-pellerin17.html

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PARIS — When the most prominent new face in France’s effort to oversee the new economy speaks, her pronouncements may be followed almost as closely in Silicon Valley and Seoul as in Paris.

Fleur Pellerin, a deputy finance minister, is the point woman in President François Hollande’s campaign to stimulate innovation. But in trying to put a French imprint on the digital economy, she has been drawn into a growing number of disputes with U.S. technology companies like Google, Twitter and Amazon.

In South Korea, it is Ms. Pellerin’s personal story that fascinates. Abandoned on the streets of Seoul as a newborn, she was taken in by a French family who raised her in the suburbs of Paris. While more than 150,000 South Korean children have been adopted by foreign parents since the Korean War, only one, Ms. Pellerin, has risen to the top ranks of the French government.

In one of the clearest signals yet from the French Finance Ministry that the government is intent on making the Internet conform to French law and custom, Ms. Pellerin last week waded into a dispute involving Google, whose advertising had been blocked by a French Internet service provider, Free.

The move was widely seen as an attempt by Free to force Google to pay for network access. As a preliminary step, Ms. Pellerin ordered Free to restore full service, but she made it clear that she thought the French company had a legitimate grievance.

The appointment of Ms. Pellerin last May, after Mr. Hollande’s election, prompted talk of a new orientation in French technology policy, where mistrust of foreign companies has sometimes been the guiding principle.

Ms. Pellerin, 39, is the first French government minister of Asian extraction. Although she has never visited the land of her birth, in French technology circles her rise fostered a perhaps naïve hope: Might Ms. Pellerin transform France into a European version of South Korea, where ultrahigh-speed broadband is ubiquitous and electronics giants like Samsung and LG have become world-beaters?

“I would like to make France one of the top nations in terms of digital innovation,” Ms. Pellerin said during a recent interview in her office at the Finance Ministry, which juts out over the Seine in eastern Paris like a giant, modern version of a medieval river toll barrier. “If we don’t act in the next few years it will be too late.”

Yet anyone expecting a drastic break with French governing traditions might be disappointed by Ms. Pellerin. After her unusual arrival in France, her upbringing and rise through the system were largely indistinguishable from that of many native-born members of the French administration.

Raised by middle-class parents — her father, who has a doctorate in nuclear physics, is a small-business owner — Ms. Pellerin grew up in two Paris suburbs, gritty Montreuil and wealthier Versailles. A promising student from the start, she was educated at elite institutions, including Sciences Po and the École Nationale d’Administration, which serve as finishing schools for the country’s ruling class. Before joining Mr. Hollande’s government, she was a magistrate at the Cour des Comptes, a body that audits the public finances, and worked in public relations.

Ms. Pellerin’s husband, Laurent Olléon, is also in government service, as an official in the office of Marylise Lebranchu, the minister for the reform of the state and decentralization. Ms. Pellerin has an 8-year-old daughter from a previous marriage.

In her new role in government, Ms. Pellerin has become the central figure in Mr. Hollande’s drive to establish “digital sovereignty” — the principle that French rules should apply to international Internet companies, which sometimes hover elusively beyond the reach of the national authorities. This has prompted clashes with a growing number of American technology companies.

Overseeing investigations of these companies on taxation and other matters, even while wooing them to invest in France, is a balancing act, Ms. Pellerin acknowledged.

“It’s not a crusade against Americans,” she said. “We are just trying to put everyone on a level playing field.”

Ms. Pellerin’s appointment last year drew considerable attention in South Korea, where reactions ranged from pride in her success to soul-searching over the large number of Korean babies that have been given up by their genetic parents and sent abroad.

Ms. Pellerin said she had been surprised by the “buzz” in South Korea over her French government appointment. Not only has she never been to Korea, she also does not speak the language. But she is trilingual, also speaking English and German.

Any evident ethnic pride is of the more local sort. “I was quite happy with the reaction in the French Asian community,” said Ms. Pellerin, who brings a bit of Parisian chic to the otherwise drab government of Mr. Hollande, greeting visitors in leather trousers and a casual blazer. “It is true that they are not very well represented.”

Ms. Pellerin has led efforts to integrate ethnic minorities into the sometimes closed establishment of France. From 2010 to 2012 she was the president of the 21st Century Club, a French group that promotes diversity in employment.

As for growing up with the knowledge that she had been abandoned and adopted, Ms. Pellerin said this was something “I hardly speak about.”

“I really consider myself French,” she said. “What is important to understand about what I’ve done is how I was brought up by my parents.”

Far from shielding her from criticism, Ms. Pellerin’s compelling personal story and the formidable résumé she has assembled before age 40 sometimes seem to draw special scrutiny.

During a radio interview last year, shortly after she had been named to her post, the host, Daniel Schick, led off this way: “Do you really know why you were chosen? Is it because you are a beautiful woman from a background of diversity? Is it because you are a member of a quiet minority? Because you are evidence of a successful adoption? Because you are a strong signal to the Asian markets? Perhaps also because you are competent?”

Ms. Pellerin parried the provocation deftly, laughing sarcastically and adding, “This is starting very badly.”

As a de facto economics ambassador for France, Ms. Pellerin has also been thrust into uncomfortable situations. Talking up the country as an investment destination late last year in Boston and New York, she found herself facing skeptical audiences after her boss, Arnaud Montebourg, the industry minister, publicly castigated the steel maker ArcelorMittal over plans to close unprofitable blast furnaces.

“It was a bit difficult to explain what was going on in France,” she acknowledged, hinting that at a personal level she had misgivings about Mr. Montebourg’s approach. “The government is diverse. You can have different sensibilities in the government.”

Ms. Pellerin said she wanted to encourage a culture of entrepreneurship in France, where the creation of private wealth is often viewed with suspicion.

“When you look at the ranking of the most popular people in France, you have actors, you have engineers,” she said. “But you never have entrepreneurs. We have to change that.”

Mr. Hollande late last week secured a compromise with unions that is aimed at reducing barriers to hiring. Yet French entrepreneurs complain that the Hollande government has made life more difficult for would-be job creators by sharply increasing the capital gains tax, something that falls particularly hard on entrepreneurs when they seek to sell start-up businesses.

Frédéric Montagnon, a co-founder of Overblog, a French blogging platform, said Ms. Pellerin had missed an opportunity to use her high profile to positive effect.

“I want her to be more enthusiastic,” Mr. Montagnon said. “Unfortunately, Fleur Pellerin and the other members of the government speak only when there is a crisis.”

For Ms. Pellerin, there have been plenty of these. One is a clash with American technology companies, including Google and Amazon, over the strategies they use to minimize European taxes. By routing their French sales through low-cost jurisdictions — Ireland and Luxembourg, respectively — these companies largely avoid paying taxes in France. The companies insist that this complies with European Union law, and Ms. Pellerin acknowledged that getting them to contribute to the French Treasury might take time.

And though the resolution of the face-off between Free and Google fell in Google’s favor, she made it clear that she sympathized with Free, which says its network is burdened by high traffic volume from videos on YouTube, which is owned by Google.

“Google takes advantage of the bandwidth and the creative content of the Internet,” she said, “but never contributes to the financing of the infrastructure or the content.”

Ms. Pellerin is still monitoring a separate standoff, this one between Google and French online publishers who want to be compensated for Google’s search engine links to their content. Mr. Hollande has threatened legislation if a solution is not found soon.

And then there is Twitter, a forum Ms. Pellerin herself is fond of using, but one whose largely untethered expression sometimes clashes with French sensibilities.

A French court is investigating whether the company should hand over the account details of users who posted anti-Semitic comments last October.

The company removed some of the postings after complaints that they violated French laws against hate speech but says it will not divulge user information without a court order in the United States, where Twitter is based.

Ms. Pellerin’s take? “We really would like to welcome Twitter in France,” she said. “But the question is, How can you let people on social networks violate local laws?”