French Fine Amazon For Free Shipping 578
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."
Re:What possible reason (Score:2, Informative)
Re:What possible reason (Score:4, Informative)
Germany has a similar system in place but is also facing problems because the Swiss have decided to allow discounted German books.
So the law gave readers a wider range of books and, on the whole, helped keep prices lower.
Re:Discounting the price of a book? (Score:3, Informative)
The real beef [01net.com] (link in French, sorry) the Syndicat de la librairie française has with Amazon (and other online sellers) is twofold. By not charging delivery costs (In France and I think Germany, there is no minimum order for free delivery costs if you only buy books), they are
Both of which are forbidden under French law (loi Lang). Amazon simply argues, that delivery merely an extension of the sale contract, aimed at actually bringing the goods to the customer, but apparently, the courts do not agree.
Re:Discounting the price of a book? (Score:2, Informative)
TANSTAAFL, shipping costs money, no miracles here, especially that Amazon is not a mailing company, so it's not like they could ship it on their own, and they are no charity to donate the service completely free of charge.
The customer gets to pay for the shipping, that's one thing that is certain. Now which part of the price the shipping comes from is the question. Amazon could discount a $8 book by $2, then add $2 of their real costs for shipping and the customer pays $8 for the service - but that would be illegal. So they sell the book at $8, no discount, and add 'free shipping', which nets the customer $8 and suddenly is legal? Maybe by some very twisted lawyer logic, but not by common sense. $2 less of what you pay for the service is still the same $2 for you as a customer, no matter if it goes off the base price or off shipping fee.
Re:Discounting the price of a book? (Score:3, Informative)
So, when Amazon drops the shipping, the price is now $7.49. That is way above the 5%. After all, if a brick and mortar store discounted the price of their shipping from all their books, all you would see is the sale price and they would get dinged by the law too. The only difference with the Amazon thing is that they are saying what part of the balance sheet the sale goes under.
Re:What possible reason (Score:2, Informative)
Look, in retail, floor space == $$$$. In the U.S. (and probably most of the rest of world albeit with different units), retail space is leased per square foot per month. The more bookshelves you have, the more square footage you need to house them all. The more books you have, the more bookshelves you'll need.
Carrying a very, very broad and deep selection of books means that you'll have a lot of books that will sit on the shelf collecting dust until the right buyer comes along. Something like Harry Potter or the latest John Grisham or Stephen King novel will fly off the bookshelves quite quickly -- a book on the esoteric practices of Zoroastrianism will move much, much slower.
If you only dedicate floor space to the best sellers, you can sell them at deep discounts because you'll make it up on volume.
For the rest -- well, a set of bookshelves and associated space required that takes up 10 ft^2 in a $30/sq. ft. facility ends up costing $300 a month. In order to make money, you need to sell more than $300 worth of books from that shelf per month. That doesn't seem like much, but if you have a bunch of odd books waiting for the right buyer and sell only 1 or 2 a week, you didn't make it.
That's reality for the small independent bookseller.
Re:Actually, the real beef... (Score:4, Informative)
Re:Discounting the price of a book? (Score:1, Informative)
Re:What possible reason (Score:2, Informative)
The "French Booksellers' Union" - Syndicat de la Librairie Française - is not a labor union. It's a business organization. They don't fight for worker's rights, they fight for trade regulations that help their business.
Re:Discounting the price of a book? (Score:1, Informative)
I can think of a few reasons why some Americans may have Anti-French feelings
French companies were involved in illegal oil deals with Saddam - in violation of UN treaties - and was one of the primary reasons the French Government was so opposed to the current war in Iraq - but they claim that American's are the "bad guys". [guardian.co.uk]
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 [wirednewyork.com]
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. [greatestjeneration.com]
I don't claim these are great or even reliable sources, just the first ones that turned up in a casual Google search.
Re:Discounting the price of a book? (Score:5, Informative)
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:Amazon should think about it (Score:3, Informative)
But I think the french judges are barking up the wrong tree: the real culprit here in France is the french "public" postal system. It used to be a public monopoly ("La Poste"), aimed at making the service affordable at an equal price whoever you are, wherever you are in the country. I.e. if you were a marketing company with 20000 letters to send a day, you had to pay roughly the same (per item) as an individual who occasionnally posts one letter. So far, so good.
Then the UE commission pops in and says : "hey, you have to deregulate your market : postal service can no longer be a monopoly, you will have competitors from now on (DHL, UPS, FedEx, and so on)".
La Poste says "OK, so we have to adapt to that new competition. But most of our traffic comes from big businesses, which we charge the same price per letter or parcel as we do for everybody. DHL and FedEx are new on that market and they will target the same public: big businesses, corporate mail. Few clients, big opportunities, lots of mail."
"So, says La Poste, we're going to make special offers at very low prices per item for those big businesses with lots of parcels to send everyday. Let's make an initial threshold at, say, 10000 items per month to obtain those bargain prices. In order to compensate for the loss, individuals and smaller businesses will pay a higher fare."
In a really open market with lots of competitors on every segment of the market, this should all be fine and dandy: if the smaller businesses and the individuals don't want to see their fares go through the roof, they can always go and see another provider. Unfortunately, this is not the case: due to its former monopoly and public service requirements, La Poste is the only provider that has offices everywhere in the country, delivers goods everywhere (not only big cities), and therefore maintains a de facto monopoly on that market.
Now, this is why Amazon has an unfair advantage over its competitors: it is big enough and sells enough items per day to access the special fares provided by La Poste, something smaller businesses don't have, and therefore they can afford to ship for free. But should Amazon be held responsible for the unfair pricing of a monopolistic postal system ?
Net Book Agreement Wasn't A Law (Score:3, Informative)
It ended when such collusion was ruled to be illegal. If smaller shops disappeared, it's because they had previously only existed by unfairly exploiting the consumer.
Re:The price of socialism (Score:3, Informative)
Re:Discounting the price of a book? (Score:1, Informative)
[Great] Britain comprises: England, Scotland and Wales.
What you describe is the "United Kingdom of Great Britain and Northern Ireland", normally shortened to the United Kingdom. (see for example [wikipedia.org]
Re:As much as Americans like to kick the French... (Score:2, Informative)