French Fine Amazon For Free Shipping

strech writes "Ars Technica reports that France is fining Amazon for offering free shipping on some orders. A French high court ruled in December that the practice violated a law preventing discounting the price of a book more than 5% off of the publisher's recommended price. Amazon has decided to pay the fine, rather than drop free shipping. The fine currently stands at €1,000 per day but is automatically reconsidered after 30 days, after which it could be raised dramatically."

Comments

Discounting the price of a book?

[j.sanchez1]

How the hell does giving free shipping mean that the price of the book is discounted? The book is $7.99 or whatever regardless of the price of shipping, free or not.

Re:Discounting the price of a book?

[dpete4552]

Because the court decided the price of the book was the total cost to the customer after the book cost itself AND ground shipping were taken into account. So if the book is $7.99 and ground shipping is $2, then the total cost to the customer is $9.99. By Amazon not charging the customer that $2 they have, in the eyes of the court, discounted the book by 20%.

IMO, it sounds like the court went out of their way to find a definition that would allow them to bully an American company in order to protect French book sellers.

Re:Discounting the price of a book?

[j.sanchez1]

But TFA says "list price".

That law forbids booksellers from offering discounts of more than 5 percent off the list price, and Amazon was found to be exceeding that discount when the free shipping was factored in.

Wouldn't that mean the cover price on the book itself? I don't see how shipping and/or tax would be included in that.

Re:Discounting the price of a book?

[jellomizer]

Forgive me for sounding American, But that sounds like a stupid law to me...
Amazon.com already bought the books so the publisher already has their money and so would the authors. Whatever price they decide to sell them should be up to Amizon. If they want to cut their profits and leave money on the table it is up to them to make that choice. I would guess the law was passed to help the Mom and Pop err um. Mummaire and Pappaire (Yes it is most likely spelt wrong and problably only used in Quebec French) Shops to insure they can compeat with the big guys. But shouldn't the restriction occure between the publisher and retailer to insure that the large company cannot buy bulk orders at a higher discount forcing the company to sell the books at simular prices.

There are pleanty of non-evil reasons to sell books at a discount, for example some time books are updated or are not popular so they will sell them heaviliy discounted to get them off the inventory. (selling at a loss or break even pricing) Because of Bulk Shipping I bet Amazon Get good rates for shipping. So where it would cost $2 to ship a book it will only cost Amazon $0.50. Thus making this law even more flawed.

As I said I am sorry if I sound to American, but I tend to beleave in a free market echonomy, with its ups and downs.

Re:Discounting the price of a book?

[p0tat03]

Documentation from Amazon will easily prove claim #1 to be false (there's no way they're selling at a loss), and IMHO only someone out to get the company would claim #2, since shipping is OBVIOUSLY an ancillary service that adds no value to the product besides what consumers ALREADY expect from the sales contract. This is a good example of gross judicial abuse, takes the law where it was never meant to be applied, and amounts to legislating via judiciary.

Re:Discounting the price of a book?

[Anonymous Coward]

Yes, France does have some great whines.

Re:Discounting the price of a book?

[dwandy]

Whatever price they decide to sell them should be up to Amizon.

actually i believe in the Grand Old U. S. of A has anti-dumping and other competition laws. These laws are France's. Yes, they will be different from those in the US, but the intent is the same: keep companies from exerting undue market pressure, which (in theory) causes competition, which (in theory) is better for the consumer.

The real question for Amazon's lawyers is why they don't relate the "free shipping" to "free parking" at a mall...that *should* wipe out the argument and put it in perspective

... but IANALMLAFL (...Much Less A French Lawyer)

Re:Discounting the price of a book?

[mdozturk]

As a publisher I can tell you the breakdown is roughly something like the 25% for printing, 25% for the author/publisher, 50% for the distributor. When amazon gives a discount it is from its own share (the 50%).

Dumping means selling less than the cost to print (>75% off the cover price). In the US the laws are designed for the benefit of the consumer. Lowering prices are encouraged.

Re:Discounting the price of a book?

[Trebonius]

The first of your three is the only one that makes any sense, but it's not like our corporations are any less opportunistic.

Who cares whether they'll allow our words in their language? They're proud of their language, and they have strong ideas of what is and isn't a French word. So? Are we only friends with people who use English words?

We're going to base our opinion of an entire country on the actions of some teenage hooligans?

Re:Discounting the price of a book?

[Harold Halloway]

OK, I can't let these pass:

"French companies were involved in illegal oil deals with Saddam - in violation of UN treaties - and was one of the primary reasons the French"
- Well the US never sold anything to Saddam did they? Like arms for instance when Iran was considered a much greater threat?

"The French are adamantly opposed to allowing any "English" words to become used in French conversation and thus insist on creating 'proper' French words to avoid the inclusion of non-French words into daily use"
- This depends on who you mean by 'the French'. I didn't RTFA but it's likely to be another pronouncement by L'Academie Francaise whose job it is (surprise surprise) to protect and promote the French language. Not exactly Kristallnacht, is it?

"Thousands and thousands of non-French servicemen gave their lives to help France fight for it's independence after being quickly taken over by the Nazis - when the latest war started in Iraq, how did young French people show their "support" for all of those dead servicemen? By painting swastikas on their tombs and overturning their headstones."
- Yes and thousands and thousands of French servicemen gave their lives fighting the Nazis in WWII and the Germans in WWI. Many thousands, including women and children also perished in the underground resistance during WWII. Don't tar the whole country on the basis of a few disaffected pseudo-Nazi youths. Fer chrissakes, they paint swastikas on graves in Israel. It proves nothing. And please remember that the French were there in both wars from the start - they didn't saunter in reluctantly after a few years and claim all the credit, unlike a certain North American country I can think of.

I'll tell you why the Americans hate the French - it's because the French have history and culture, philosophy and art. They have a cuisine which is based on rather more than saturated fat and corn syrup. They don't roll over and beg whenever the US clicks its colonial fingers (how I wish the UK were the same). And the French themselves are attractive, intelligent, reliable, honourable people. That's why the Americans hate them.

Re:Discounting the price of a book?

[Lord Ender]

Anyone who understands economics is anti-French, including the French economists I know. This is just one more example of the corrupt French laws that hurt the consumers, businesses, and economy of France. There is a reason the French economy is so far behind the rest of Western Europe.

The entirety of French economic policy falsely assumes wealth is a zero-sum game while completely overlooking the fact that the wealthy will flee if their tax burden is high compared to the rest of the developed world.

Re:What possible reason

[cnettel]

What possible reason could France have for this law, besides being successfully bought by big business?

Quite sad really. The notion that it helps small retailers, so business, but not necessarily big business. The publishers and the retail sector can gain from it, while those interested to compete on price and the general public do not, at least not related to their book purchases.

Re:What possible reason

[FireFury03]

What possible reason could France have for this law, besides being successfully bought by big business?

I understand that the law was passed to prevent supermarkets from putting book sellers out of business by selling the most popular books at knock-down prices (the theory being that if all books are sold by the supermarkets rather than proper book stores you would only be able to buy the most profitable books).

European Mindset?

[phobos13013]

I'm trying hard to understand this. Looking at European governmental action, typically these governments act to protect the consumer. I do not immediately see how forcing a higher price on a commodity can be good for the consumer. But then I remember Wal-Mart; look at Wal-Mart by offering lower prices for so many years has hurt local economies, local goods providers who cannot compete with volume pricing... which is exactly what Amazon does as well. They can take a hit on shipping because they probably have cut rate contracts with delivery companies anyway that local French sellers cannot compete with! So, all I can think is that the French government has bothered to look beyond the obvious, oh we save them 8EU so we are obviously better for the consumer and realized that there is more to a healthy economy and healthy society than saving someone a buck or two...

Re:What possible reason

[0123456789]

We had a similar law in the UK until about 10 years ago. Prior to it being repealed, I thought it was absurdly anachronistic. However, since it was repealed, supermarkets have been stocking, and massively discounting, high-profile books (Harry Potter and the like). The downside is that it's become almost impossible to find a small, independent bookshop, and even the large chains are struggling. In response, the large chains are cutting the breadth of their stock, instead stocking more of the high profile titles, and similarly discounting them. The net effect on the consumer? You can get Harry Potter or 2 dozen other titles for £2, but you're screwed if you want something else. I think it's fair to say that most /. readers want to buy books other than John Grisham, Harry Potter, and celeb biography du jour.

Thankfully, Amazon fills the gap. However, browsing a decent, well-stocked book store is a far more pleasant experience than browsing Amazon.

Sarkozy may have a point

[elrous0]

Isn't this exactly the kind of nonsense that Nicolas Sarkozy wants to put an end to? Fining a business for doing something that BENEFITS consumers just because of pressure from some lazy brick-and-mortars (who would rather hide behind their union and the laws they've forced through than innovate and compete) seems insane.

It is just a question of etymology

[paiute]

Because the French have no word in their language for entrepreneur, they are not capable of understanding the American concept of laissez-faire.

Fffmmmm...

[archeopterix]

French fine for free freight? Formidable.

Re:What possible reason

[elefantstn]

I'm not sure how to take seriously someone who says in 2008 that you're screwed if you want a non-bestselling book. We live in a time of unprecedented availability of books (and music, and movies, etc.). Truly screwed was when you went to the cozy little independent bookshop and they didn't have your book. Then you backordered it for six weeks.

This is paradise for book-buying, regardless of whatever romanticized ideal of the independent bookseller you cling to.

Because smarter people pick up the tab.

[FatSean]

When the retards who only see the cost of their purchase in dollars destroy their local economy, they will go crying to goverment for help. Those of us who knew better will have to bail them out. Better to prevent the fools from dragging us all down. This is the same logic used for gun control, drug laws, seatbelt laws, child protection laws, etc...

Actually, the real beef...

[raehl]

Is that France has a pile of protectionist laws screwing up their economy and this is just one of them.

Amazon isn't selling at a loss. They're just selling at a price that some stores don't want to compete with. And French law, instead of giving the consumer the right to buy where they can get something the cheapest, instead forces the consumer to pay more for a product than they need to.

You'd think it was pretty silly if the US had a federal law that said that you could only sell a product for no less than 5% of MSRP, wouldn't you? And you'd think it was ESPECIALLY silly if that law only applied to particular products?

Well, except agriculture, but there we just write checks to producers.

Re:Actually, the real beef...

[genji256]

And French law, instead of giving the consumer the right to buy where they can get something the cheapest, instead forces the consumer to pay more for a product than they need to. This law allowed small bookstores to stay alive. You might see this as an attack on free market (which it is), but it is also allowing French people to buy books they would have a hard time to find otherwise. In the US, on the other hand, the big stores are healthy, but finding something which is not mainstream is rather hard, especially outside the big cities. Now, should this be done for every product? I don't think so. The consumer who wants something eclectic doesn't have a right to get it (even more at a reasonable price), like fresh fruits at a market (French don't have laws to maintain the markets and they mostly buy their food at large shopping centers). However, Lang decided that the culture had to be treated differently, which I agree with, even though it goes against the conception of free market (as others have stated, free market doesn't solve everything).

Re:Actually, the real beef...

[cfulmer]

Beg pardon? Amazon is, after all, the world's biggest bookstore. You're much more likely to find something out-of-the-mainstream at Amazon than you are at your local bookstore. Heck, if that weren't the case, people who want out-of-the-mainstream books would continue to shop at the local bookstores, who would not be threatened by Amazon at all.

The only "culture" at risk here is the culture of inefficient small bookstores.

Re:What possible reason

[antifoidulus]

Amazon et. al are great when you know exactly what you are looking for. But(way back when anyway) small independent bookstores are(were?) usually run by book nuts who really got a chance to know you and could be counted on to discuss books you have read/like/might like. Amazon's suggestion software is good, but not a perfect replacement. Not to mention some people enjoy the atmosphere of just wandering through rows and rows of books looking for a treasure.

It's still probably not worth erecting such stubborn laws to protect, but there is something to be said about the atmosphere of a small book store.

The price of socialism

[theophilosophilus]

The price of socialism is that getting a good deal is a crime. If you aren't paying full price someone isn't getting paid full price. The U.S. was like this once. Under FDR a farmer could get fined for growing wheat for the sole purpose of feeding to his family because, hypothetically, if every farmer did this it would impact the market for wheat. See Wickard v. Filburn. Imagine what this logic would mean if it was applied to technology.

Re:What possible reason

[elefantstn]

Yeah, visit Amazon.com (or .fr) and just look around. Nothing but high-volume items to be seen! And certainly no way to find out-of-print used books, either. Truly, the only winner is Jeff Bezos.

The same issue as always

[houghi]

If you want to do business in a country, you follow the laws by that country. How hard is that to understand?

If you do not want to do that, you do not do business in that country.

Wether this is an American company in France, A Belgian company in Spain or a Russian one in the USofA.

I am sure that I will be fined selling alcohol to people under the age of 21 in the USofA, no matter what my opinion is of that law, or the fact that the country of my headoffice allows this. I am sure both Heineken and InBev would agree.