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 Google, Facebook 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.