France delivers postal blow to Amazon; Law to aid bookshops stops internet booksellers offering free delivery

October 3, 2013 5:15 pm

France targets Amazon to protect bookshops

By Hugh Carnegy in Paris

France’s parliament has passed a law preventing internet booksellers from offering free delivery to customers, in an attempt to protect the country’s struggling bookshops from the growing dominance of US online retailer Amazon. On Thursday, Aurélie Filippetti, the culture minister who originally proposed the move, denounced Amazon for its alleged “strategy of dumping”, claiming that the company used offers of free delivery to get around French laws controlling the price of books.Speaking during a debate in the National Assembly, she said: “Once they are in a dominant position and have wiped out our network of bookshops, it is a strong bet that they will raise their delivery charges.”

The new law, which will now go for ratification by the Senate, is the latest move by France against US internet companies, which it believes are unfairly using their market power to overwhelm local competition.

The socialist government of President François Hollande is lobbying the EU to regulate online platforms and applications and is pushing for international agreement on taxing internet companiessuch as GoogleFacebook and Amazon in the countries where customers use their websites.

Defending France’s cultural assets against the perceived threat from US products and companies has strong cross-party support. All main parties supported the new law, which will be added to 1981 legislation that allows a maximum 5 per cent discount on the centrally-fixed single price for books.

But Amazon attacked the new law, saying all measures that increased the price of books damaged the purchasing power of French consumers and discriminated against those shopping on the internet.

“The impact will be greatest both on the depth of the catalogue [offered to consumers] and on small publishers for whom the internet represents a big part of their business,” Amazon said.

French politicians on the left and right have expressed concern about the fate of France’s strong tradition of independent bookshops in the face of fast-rising internet sales, which had captured 13 per cent of the market by 2011, according to figures in a parliamentary report. Amazon claims some 70 per cent of the online sales.

In June, the government combined with French publishers to launch a €9m joint plan to support independent booksellers. However, Christian Kert of the centre-right UMP party – one of the sponsors of the new law – said bookshops remained “in a difficult situation because of their rents, personnel charges and the cost of their stocks”.

He said Google, Apple, Facebook and Amazon between them had between €2.2bn and €3bn sales in France, but paid on average only €4m in tax each.

Earlier this year, Mr Hollande forced Google into pumping €60m into the country’s ailing newspaper industry by threatening to introduce legislation to force the search engine to share its revenues from links to French media articles.

Another proposal to impose a tax on the sale of internet-connected devices to help fund French films and TV production has been dropped.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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