friday, 4 october of 2013

France Proposes Law Forbidding Book Discounts on Web


France Proposes Law Forbidding Book Discounts on Web

French lawmakers moved closer to approving a bill Thursday aimed at protecting local bookstores against competition from Inc.,AMZN -1.79% the latest step by European governments and regulators to try to rein in what they see as the growing power of a group of largely American tech companies.

The bill, approved unanimously by France's lower house of parliament, would effectively force online booksellers to sell at higher prices than brick-and-mortar stores, by banning any seller from applying government-regulated discounts to the cover prices of books that are shipped to readers. Instead, sellers could only mark down the cost of shipping.

The proposed law, which now heads to France's senate with the backing of both major parties, was explicitly aimed, lawmakers said, at Amazon, which frequently discounts books and ships them free of charge to French buyers—a deal independent booksellers say amounts to unfair competition.

Legislation in France that cleared the lower house would prevent online retailers from discounting books; Amazon called the bill discriminatory.

"Free shipping is simply—we must use the word—a strategy of dumping," French Culture Minister Aurelie Filipetti said, during parliamentary debate Thursday.

Amazon, which denies engaging in dumping, shot back that the proposed law would hurt both consumers and small publishers. "Any measure aimed at raising the price of books sold online would hurt French people's ability to buy works of culture, and would discriminate against online consumers," the company said in an emailed statement.

Thursday's vote is the latest effort by Paris and other capitals to curb the growing influence of a handful of American Web companies over Europe's Internet economy. Regulators are probing everything from allegations that Apple Inc. is abusing its market position in online application stores, to whether Google Inc.'s privacy policy violates European law.

Amazon has been under particular scrutiny for a corporate structure that allows it to avoid paying much corporation tax in many European countries. France plans to push at a summit later this month for Europe to adopt new tax rules aimed at redefining where digital companies earn revenue, and regulate widely used Internet platforms, which could include Amazon.

Bookstores have been a cause célèbre in France for decades, seen as a guardian of the country's language and culture. Since 1981, laws have regulated book prices, forcing vendors to sell books at no more than 5% below the cover price, in an effort to protect independent bookstores from large chains. In 2011, the same law was extended to online sales.

Bookstores made up more than 23% of printed-book sales in France in 2011, according to a government report. Online sales, meanwhile, accounted for roughly 13% of printed-book sales that year, the report said. The remainder were sold in big-box stores, culture-product shops like FNAC, book clubs and other miscellaneous outlets.

By contrast, Amazon alone represented an estimated 30% of printed-book sales in the U.S. in 2011, a figure that has since grown to roughly 40%, according to Albert Greco, a market researcher who studies the book industry.

We've resisted well so far, more a slow drip than a collapse," said Guillaume Husson, executive director of Syndicat de la Librairie Française, a group representing independent booksellers. "But we don't want to wait until the situation is reversed in order to do something."

(Published by The Wall Street Journal – October 3, 2013)

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