Amazon.com, one of the largest stores online, offers several features that entice buyers to purchase there, such as "one-click purchasing" and free shipping on many items. While Amazon's multiple attempts to patent "one-click purchasing" has drawn no small amount of ire, the offer of free shipping has been lauded as a beneficial attribute -- until now.
Amazon.com's French website Amazon.fr currently stands in violation of a 1981 French law prohibiting certain discounts on books. The ruling by the French High Court contained two fines -- a one-time lump sum payment of €100,000 to the French Bookseller's Union, and a fine of €1,000 per day until the offending "free shipping" promotion is ended. While the proverbial gavel banged on December 12th, a "grace period" until mid-January gave them time to "correct the problem" and respond.
Amazon indeed responded -- but with defiance rather than compliance.
The 1981 Lang Law in France prohibits several type of discounts on books, including "loss leaders" -- selling a book below cost -- and offering a discount of more than 5% off the list price. With the "free shipping" discount factored in, France officials found Amazon in violating this law; but rather than raise their prices and risk losing customers, Amazon decided to hold fast. The company opted to pay the €1,000 per day fine.
Amazon.com founder and CEO Jeff Bezos wrote an email calling attention to the fact that "France would be the only country in the world where the free delivery practiced by Amazon would be declared illegal" and invites customers to sign an online petition stating their support of free shipping.
While Amazon's fight may seem noble, the current value of the fine is fixed for thirty days only. At that time, it will be "adjusted" ... and likely in an upward direction.
quote: The same law applies to all companies operating in France from what this article says. So it's not about foreign competition.
quote: Maybe the rules are different in France -- here in the U.S. selling things at below cost is considered predatory pricing on the macro.
quote: yet they are still legal entities in your own country making you no better.
quote: The "Bookselling association" in France is not mandatory, you may not be part of it if you so wish.
quote: The vast majority of the people on here are americans.
quote: Whatever you say that points out something remotely bad about there country will fall on ignorant deaf ears and get rated down, while bad things about over countries will get rated up - as perfectly demonstrated.
quote: You cant get through to these xenophobic people that think they're are above everyone else.
quote: no other EU country has passed as many laws requiring French quotas on everything from TV, radio, movies, media, and even food content.
quote: Then how do you justify the MPAA and RIAA?
quote: The 1981 Lang Law in France prohibits several type of discounts on books, including "loss leaders" -- selling a book below cost -- and offering a discount of more than 5% off the list price.
quote: It is exactly the same with the French and books. If the price of book ABC is XYZ, that book cannot be sold for less than 95% of the XYZ price. Sure, there may be other books at the lower price, but you still cannot buy book ABC for less.
quote: But in the US it's Bose that is making these demands. Bose doing it only makes business better for Onkyo. In the case of French books, Radio Shack and Tweeter get together to have the government force everyone else to have their same inflated prices.
quote: It sort of does though. The law states that a place cannot sell books on a loss leader. This typically means less than MSRP or at least less than what everyone else is selling at.
quote: If Amazon does that, everyone will just turn to FNAC or Alapage. So they can try, it won't matter much.
quote: If the French people prefer smaller bookstores, let them have the smaller bookstores.
quote: Um, nice comment... but how exactly is it a six?
quote: Don't attempt to change the subject. Certainly the US involvement in the liberation of France was more significant-- and more current-- than the French involvement in the Revolutionary War.
quote: In any case, your implication that criticism of contemporary French policies are out of line because of actions taken three centuries earlier is fatuous, to say the least.
quote: So now comes a veiled insinuation that colonial America may have been responsible for the rise of the Nazi Party?
quote: Ever heard of the Battle of the Chesapeake Bay? A decisive and very important French victory in the American Revolutionary War.
quote: "France only wins when America does most of the fighting."
quote: That assumes there would be no United States if France had not intervened, something impossible to prove one way or the other.
quote: Or better yet, shutdown Amazon.fr and no longer do any business in France. Why would any corporation want to do business in a hostile environment?I wouldn't pay the fines, I'd shutdown the site.
quote: Besides, wouldn't you rather stay open just to spite them?
quote: Within a few months of the 2006 NAFTA ruling that the Canadian subsidy was in fact trivial, the US government agreed to return the sequestered tariffs on softwood. Trying to cast this as the US acting as some sort of rogue agent, irresponsive to treaty obligations and international law is just plain incorrect. It's a simple case of due process taking its own sweet time.
quote: However, no state is perfect. The argument that, since the US isn't a perfect haven of laissez-faire capitalism, no one is allowed to criticize any action of another nation, no matter how heinous, falls flat on its face. A certain degree of protectionism exists everywhere. This French action is simply a particularly egregious example.
quote: Which has nothing whatsoever to do with the fact that Canada doesn't set those stumpage fees at fair market value. They're set administratively, at a value substantially below what they'd otherwise bring. That allows Canadian loggers to operate cheaper. Ergo...a government subsidy.
quote: NAFTA (eventually) ruled that the effect of that subsidy was minor. And so the US (eventually) complied. Yes, the original claim was made by US loggers, hoping for a protectionist bonanza. But the important point here is that the protectionists lost.
quote: What if only one company was willing to pay the fiat price? Under an auction system, only one person would bid, and the price would drop. But in Canada, we don't see just one company buying at fiat prices, we see hundreds. Thus the "more than one" is the true situation. And each of those people are willing to pay at least the fiat price. So if an open auction was held, the price would rise-- some are obviously willing to pay more.
quote: Two problems with this. First of all, the French fine will most assuredly be reviewed in a month and increased dramatically...and increased again, if Google fails to comply. Courts do not like being defied.
quote: But please don't put me in the position of defending this action. Did the US drag their feet? Most assuredly. But there has yet to be an international trade dispute in which one of the parties has failed to do that.
quote: You're descending into emotional hyperbole. First of all, this wasn't some "attack on an ally". This was an action brought by US lumber interests, against Canadian lumber interests.
quote: Secondly, it's hardly the only NAFTA dispute. There have been hundreds, and Canada has been on the protectionist and/or simply the wrong side of the stick just as often as not.
quote: But you're still dodging the point. We're discussing France, not the US or Canada. No one who criticizes French protectionism is being hypocritical, unless they simultaneously support some other protectionist
quote: Face facts. France is, by far, a worse offender than the US. In a recent survey of economic freedom, the US and Canada ranked 5th and 7th in the world, respectively. France ranked 48th...an extraordinarily low score for a First-world nation
quote: Faced with chronic unemployment, lack of growth, and escalating social disorder.... Protectionist policies toward politically sensitive industries [are] likely to continue ...Foreign companies complain of high payroll and income taxes, pervasive regulation of labor and products markets, and negative attitudes toward foreign investors . Prior approval is necessary for investment in strategic sectors like public health, defense, or casinos. In late 2006, the European Commission challenged the EU legality of France's investment regulation law. Foreign investment is restricted in sectors like agriculture, aircraft production, air transport, audiovisual, insurance, and maritime transport ...
quote: I don't recall anyone saying that.
quote: I do see people implying that France has more than its fair share of anti-business, anti-competitive legislation, however. A statement that is not only true, but goes a long way to explain the economic doldrums so prevalent in the country.
quote: I wish there were cheese shops where I live, the 20 varieties of cheddar are no variety at all.
quote: I just buy my stuff at the local supermarket.
quote: Food for thought.
quote: France is simply protecting small business owners and their own economy