Amazon defies French courts over shipping costs Amazon.fr is continuing to pay daily fines rather than comply with a court order which forbids it from offering free shipping for some purchases made from its French website. The US firm was taken to court by French booksellers in December accused of discounting some books by more than five per cent of list price when free …
Amazon.fr have a petition on their website about this.
High Street stores don't charge for shipping either, so it's a bit rich to claim that Amazon, who have no High Street presence, are somehow discounting books by more than the legal 5% by not charging for something which the High Street shops don't have to charge for anyway. Free shipping just levels the field, no more.
I think the problem is they were doing more than 5% discounts on the book price. Which is fine if postage costs take the total price paid back up to above this, however free posting does not. Thefore if you argue postage should never be including, amazon will be breaking the law more often.
i think the whole point is that they CANT give a discount of the cost of the shipping - since that would be over 5%....
the french courts are saying that the free shippping is the equivalent of an illegal discount - so to simply offer them the illegal discount instead really woudlnt be helping???
The law they put in place may seem like protectionism (it probably is), but if you go to any French town you don't see their supermarkets or major chains taking over, there are always indipendantly run shops. It's not like over here in the UK where you are pushed to work out which town you are actually in because all high streets look the same these days.
You have to ask yourselfs what you want, nice looking towns with interesting shops run by locals (as well as a few larger chains) that aren't being driven out of business by aggressive supermarkets and their internet equivilant; or, as in most UK towns: mobile shop, bank, mobile shop, discount shop, Next, shoe shop (schuh, natch), dixons, another bank, tesco metro, boots, Greggs, Pret a Manger, sainsbury's local, etc. etc. And a couple of massive out of town supermarkets.
The French made their decision, we made ours, or at least the supermarkets et al made it for us, I know which I'd rather have.
Why not run the amazon.fr operation from the Chanel Islands, or somwhere else? Then it would come under the law of the host nation, and the good French citizens would be able to buy under the laws of the host nation, would they not?
Why is it that the French government have to always go out of their way to be *DIFFERENT* to the rest of the world? The rest of the world also recognises international English as the language of the air...everyone except except the French aviation authority that is!
Don't get me wrong here, I love the French people with all my heart. Indeed, I myself am of French decent. I have always found them welcoming and friendly, but their government??! - eeesh! they obviously have some historical issues that they should see an analyst about!
Liberté they have, but what ever happend to égalité and fraternité?
How stupid can a country be to make it a law that a seller cannot sell a product at less than 5% of the SUGGESTED retail price? If a supermarket, Amazon, or whoever else can purchase the books for less money, and are willing to sell the books for less money, why should they not be allowed to? Isn't allowing them to sell at a lower cost (though not at a loss) beneficial to the public? Nobody forced the bookshop owners to start and run their bookshop. As such, the public should not be subsidizing their existence by paying artificially-inflated prices.
The picture postcard view of French towns dosn't include supermarkets and so on, but if you look, so shall ye find. They are there, just not in the old town centres. points in case...
http://www.eriding.net/media/photos/geography/france/051216_cbrown_mp_geo_france_551.jpg
http://p.vtourist.com/1446203-AUCHAN_FRENCH_SUPERMARKET-France.jpg
http://www.day-tripper.net/xzi/xphotoshop4boulevards3.jpg ...being a particular example showing Claire's Accessories in the middle distance of the mall, amongst all the other big chain stores.
However, it might be noted that we are not talking about shops here but international e-business.
The French people tend to get their way though (as history has shown),...and so if they disagree with this law, they'll get around it one way or another.
This reminds me of the wording that the French insisted was taken out of the EU constitution... sorry, treaty, which was something to the effect of "allowing free enterprise and competition throughout the EU". It must be remembered that the French are not Anglo-Saxon and have different views on business. Their's is a preservationist/protectionist view, which has it's place as Fraser pointed out above.
However, it smacks of double standards. They continue to insist on penalising Anglobalised companies in France that have the misfortune of coming up with the idea before a domestic company does, yet they are happy to give support to French industry in order to make a quick buck overseas. It's not very English, is it!
Steve, stores don't have to charge for delivery because the customer can go there to pick it up. When did you last visit an Amazon store to pick up your book? Amazon are welcome to bundle delivery cost with the book, but it seems pretty clear - you can't do anything to discount beyond 5%.
While some might consider the basic law anti-competitive, it has the benefit of making sure that towns actually *have* bookshops. As Fraser observes, the French have made their decision, and whenever I visit France (I used to live there, too) I do think that they might have some things right.
The fact that they don't do things our way doesn't *always* mean they've got it wrong ... even though they get it wrong quite enough without our help.
Sorry, wasn't laughing at you per se, but at the assumption that the French market ebbs and flows to market forces.
Have you seen the amount of subsidies the French pay out in general to maintain unprofitable businesses?? Farmers come to mind...
Having a law that ensures price parity saves them from having to supply another subsidy...
For Gatesian business practices...
I think their towns certainly benefit from it, a much nicer place to be (ooh it hurts to say that).
To those who ask "why the French?". Well Belgium has some interesting laws too, most of which are derived from Napoleonic law.
So, for instance, it's illegal to dump in the market, so no selling at less than cost price. No phone give-away when you buy a mobile subscription etc.
Personally I admire the French for being different, it's about time the UK found an identity and stopped being a little America.
There would be another advantage to operating exclusively from outside France.
As EU rules stand, when you buy goods from one EU country and have them shipped to another (e.g. by mail order), the supplier has to charge VAT. If the supplier has a presence in the destination country then they must charge VAT at that rate, otherwise they charge at the rate applicable in the country of origin.
France charges 5.5% VAT on books, the UK zero-rates them, so today anyone in France who buys from amazon.co.uk has to pay French 5.5% VAT on top. By closing Amazon.fr and shipping everything from the UK the applicable rate would be 0%, an automatic reduction of 5.2% or so, which could offset shipping :)
Would this, perchance, have anything to do with the whole 'Feedom Fries' spat? The French hate the Americans with a vengeance so I wouldn't put it past them to try to put one over on les Américains any opportunity they get. The Americans started it first of course!
Forgot to mention:
Before people from the UK get on their high horses about stupid laws, look at British licensing laws. In France you can get a beer when you want without Nanny needing to tell you how much is OK and somehow they seem to have less of a problem with drunks.
For those from the US, where do I start? Gun laws, health care, counting votes (or more to the point not), locking people up without trial, thinking that US law applies outside of the US, OJ Simpson trial, the fuss at what's-her-name Jackson showing her tit compared to the violent films Hollywood produces..........
It feels uncomfortable to defend the French, but at least attack them for something they deserve, like the quality of service you get in your average garage or the crappy food you get by the beach these days.
Perhaps, this big american company should start paying attention to other countries laws... they were in place before amazon.fr
All big business thinks they can do what they like, particularly american ones since their own protectionist government will protect them.
Stop flouting the law like it doesn't apply to you amazon and find another way to get a competitive advantage, that is what business should really be about, not who can break the law and buy their way out of it.
It wasn't that long ago that the UK abolished the "Net Book Agreement", which basically forced all book sellers to charge the same price for books (the price as printed on the back by the publisher). The proponents for opening up the market claimed that there would be more & cheaper books for all. The reality is that the only "book seller" within 15 miles of my house is Tesco who stock their shelves with nothing but chick-lit, rom-coms and lads books in the mould of Jeremy Clarkson.
Sure, I can buy anything I like from Amazon, but I can't easily discover a new author from a website - the days of happy discovery from reading the first page of a book by an author you've never heard of are now dead in the UK.
I wish we had the same law as the French.
Paris - Because that's in France.
This _is_ just protectionism: artificially punishing the many to protect the antiquated jobs of a very few. Small, independent bookshops are doubtless pretty and nostalgic -- I frequented them heavily when I was a kid, back _before_ the Internet (emphasis emphatically added) brought me on-line vendors offering easier access to a wider selection and lower costs -- but no doubt mammoth hunters on every village green would be charmingly nostalgic as well. Why should we have to pay for them, though? (And shouldn't we be supporting third-world mammoth ranchers anyway?)
But more importantly, when the times they are changin' (as is currently the case for music and print vendors), enacting laws to protect the old models may _seem_ like a help, but this will eventually hurts not just current consumers but the protected business owners who end up artificially carrying on with their heads in the sand trying to pretend "it will all just go away" instead of realizing they desperately need a new plan.
If the French government really wanted to help small booksellers threatened by low-cost hypermarkets/on-line retailers, it should probably help them figure out either a new niche/specialist service model or just something else to do because they _will_ eventually lose if they keep trying to pretend it's yesteryear. And the longer they go on pretending, the more it will eventually hurt.
Here we are in another round of french bashing, or so it seems.
What I fail to understand is why is it so difficult a concept to grasp that when you want to do business in another country you are supposed to follow the laws of that country. It's not as if the nationals had a different set of rules to follow.
When french companies break foreign laws, they take a deserved beating in courts. Even if those laws are meant to limit competition. There was a recent case where a french bank was found guilty of taking ownership of an insurance company in the US. Bank and insurance are compatible activities under the french law, why on earth would the US prohibit this (not only prohibit, as a matter of fact, but also criminalize) ? But anyway, as long as the law is the way it is, it doesn't matter. But the uproar it created, as far as I remember, was not to bash the uncompetitive US law, but the french executives who break it. And, as I said, it was well desserved.
So, what I forsee is if amazon keeps on breaking french laws, well, they're going to pay the 1000 € fine not on a per day basis, but on a per book sold basis. And truly, that would be really desserved too.
Now, for those thinking that going elsewhere in the UE will shield them, I can tell it won't. The law doesn't apply to imported books already ; prices are already free for english or US books. But as some may have noticed, not too many readers can actually read in foreign languages, and most customers of amazon.fr expect to find french books. Only those are submitted to the Lang law, and it won't matter where from they are shipped. It would break the law all alike.
I live in Germany, where I've seen just about every local book store fold in the last ten years. There are no more friendly little old ladies who know the book of which you speak, or perhaps better versions, bindings, et al. There are no longer helpful (and well informed) staff to point you in the right direction on a topic with which you aren't familiar. There are no more espresso machines where you and a salesperson can chill for a few minutes and discuss green things in general with a book store surrounding you where you can check your references. Frankly, I think this sucks.
When you let the Walmarts and other big box and internet stores in and give them free rein on their unbridled greed (for the myth of lower prices; i.e. your greed), you're basically sounding the death knell for all your neighbors' businesses. Is that what we really want? I'm definitely not a lover of all things French, but here they have it right. Vive la France.
You (and others like you) may prefer that your country had a law such as this, a law which forces all sellers to sell at the manufacturer's suggested price. This would insist on what some people would consider fair selling. But please, don't blame the big chains for ruining your country.
I sympathize with you. Here in the U.S., we have virtually no department stores anymore. If I want to buy something, I have to go to Wal-Mart or Target. That's all that's left. But I don't blame them (entirely). It's my (and your) fellow citizens who have done this to us. They voted with their wallets by buying from the cheapest seller.
If I can afford it, I'll go to the local hardware store instead of Home Depot or Lowe's. I buy from the local music shop instead of the big chains. I'll gladly pay more to support the local shops if I can afford it. The problem for me (and you) is two-fold: 1) many people can't afford to pay the higher prices of local sellers because the people are paid so low they can barely (if at all) survive; and 2) most people just don't care, if they can save money, they will.
As an afterthought, I follow up on my previous comment.
The aim of the Lang law is to protect the whole book business, not only local shops against big chains or electronic retailers.
As a matter of fact the main beneficiaries of the law are the book editors. That the law as a side effect gives a certain level of protection to local shops is merely bonus in the big picture.
How comes ? Well, it gives all the editors, big and small, the tool to protect their profit margin. Why does the law do that ? Because there's more to print than expected blockbusters, and it helps editors taking risks and printing something else than Madonna's sexual biography. If it wasn't for the law, big chains would pressure editors to lower their profit margins and at the same time would only take large quantities of sure sellers. This would certainly create the vicious circle everybody can notice travelling abroad : less traditionnal shops, unable to compete with big retailers, less offering in demanding litterature, and more expensive books.
Is it efficient ? Well, peek a look at french electronic retailers. See prices. You'll notice that books are generally cheaper in France, not only hit sellers but small runs too, we've yet many more brick and mortar retailers surviving, and we count independant editors by the thousand. So, yes, it is efficient.
The French, like the Italians and Spanish, have a slower society. They have no pub culture as we Brits (and our German and Scandinavian cousins) know it. They work fewer hours, because the French don't see "work" as the be-all and end-all of life. They see things differently. Literally. As do people from every other nation.
Most importantly, our Latin cousins have much greater rural, regional identities. Italians are passionate about their regions -- Lazio, Toscana, Calabria, Ticino, etc. -- and the French are likewise. Most people outside France know of the Champagne and Loire regions in France. Nobody outside the UK gives a gnat's chuff about Rutland, Humberside or Shropshire. Our regional identities disappeared when the Industrial Revolution effectively rewrote our society from the ground up and stomped all over our (predominantly feudal) agricultural past.
Industry has never touched to France to quite the same extent and it is still heavily agricultural and focused on small, family-owned businesses. Italy has an almost 50:50 split, with the northern plains heavily industrialised, while the southern regions have remained predominantly agricultural.
I have no quarrel with the French system or its laws. Sure, not everyone agrees with all of them, but that's why they don't live there! To Brits, the British way of life _is_ the One True Way. To Americans, their home State is usually their cultural keystone. It's the same the world over and this is a Good Thing. If everyone thought, felt, believed and lived the same way, the world would be a much duller place.
Vive la différence!
(And yes: I agree Amazon.fr should be punished. Nobody pointed a gun at their managers' heads and _forced_ them to open up in France.)
As mentionned by Viet above, when you setup a branch of your business in a foreign country, you are expected to respect the laws of that country. Whether you consider those laws good/bad, smart/stupid, fair/unfair is neather here nor there: you are meant to respect them. Don't be surprised if you end up in court when you don't.
As for this particular law, it tries to address one of the major problems you have with free markets. A free market works wonderfully well when all the players in that market are of a similar size. But once some of the players have reached a critical mass, they can use economies of scale that smaller players can't afford and compete agressively on price. You then end up with a small number of very large players or even a monopoly, at which point you don't have competition anymore. Insert the name of your favourite monopoly here for an example.
What the French law tries to do is to remove price as a competing factor so that bookshops have to compete on other aspects of the sale, such as service, choice, etc. so that it levels the playing field for smaller players. It doesn't mean big business can't compete: in most French towns, you will find a branch of FNAC, a large chain that sells books, CD, DVD, cameras, electronics and computers and that has an online presence as well. They got there because their choice was genuinely better than the competition and their service was good, rather than because they slashed prices. Conversely, if you go to my home town, you will find that the largest bookshop in town is an independant one that was started as a family business. They are succesful because their staff is very knowledgeable and approachable, clearly love books, will be able to advise you on any subject or order any title that they don't have in stock for you, even if it means ordering just one copy. Without this law, they would have disappeared a long time ago.
Now, is this a good or a bad thing? Well, it depends. It means that you can't buy 3 books for the price of 2 to stock up on easy reading for the beach holiday but you tend to get much better service and choice in a French bookshop, even in small towns, than in London where I now live.
You can argue for either approach equally well but when it comes to books, music or cinema, the French will choose competition on choice and quality over competition on price any day. Any company that wants to sell in France should respect that and the laws that go with it. There's no reason why Amazon couldn't compete on these terms. They'll just have to offer more choice and better and faster service than the competition, while charging the same price. Surely they can do that? Oh wait... service? Customer service?
I have to reply to that comment...
France has a huge industrial sector, quite comparable with the UK and it's been that way since the industrial revolution. It's just a case that most of us don't go on holiday to the industrial areas and business centres. Would you like to spend a summer in Lille ?
The South and West of France have a much more relaxed, slow pace of life relative to the rest of the country.
1. As other people have stated here, redirect to a non-French site.
2. Keep the .fr site and quote RRP in USD or GBP and then give a generous conversion into Euros, so the "discount" becomes an "exchange rate fluctuation", I'd love to see the French courts try to set currency exchange rates, that would be very amusing.
I also believe that the ability to support all of these lovely, quaint little shops is due to what can only be described as spectacular abuse of subsidies and a magnificent (I take my hats off to the government for this) ability to cheat and play the EU government game.
Oh and Viet, I agree that a company should abide by that countries laws, which means that in line with your thoughts, it would be perfectly legal to host a site selling French language books in the UK and to sell and ship them anywhere in France with out the Lang law being applicable. Thereby enabling those who want to buy cheaper books to do so. After all the law of the land here is British law not French?
Oh and to all those who say that bookstores in london are no good, Foyles? Waterstones on Regent Street, massive stores, helpful staff and eclectic mixes.
So nothing to do with IT then...
Do you really think our parliament is packed with idiots trained in sub-standard law schools from a third world country ? The 6th § of the 1st article of the law (81-766 10 august 1981 mod. L. 93-1420 31st december 1993) deals with that situation. If objective elements prove that a book was edited or printed in the EU only to avoid being in the scope of the law, but are mostly imported in France and not sold elsewhere, then the importer must comply with the fixed price law.
Oh, and of course, no retailer is subsidised in that country. None. As I already told, the law aims at protecting the editors, not the retailers. I buy many books from England. In your superb, culture friendly country, under the wonderful guidance of free market that should make every book cheaper than their french counterpart, how comes the price tag in £ is already more than 1.5 time as high as what would cost me a french novel ? That is of course *before* import costs are added and the price is changed to € with a comfortable margin. It's easy to check, I just need to peel the € sticker. A pocket book in France is around 6 € ; same book in the UK has a "recommended" street price of 7 £. Import costs have me pay 12 € in the end. Fact is : when you let "free" market play, you end up paying *much more* because the first motion of editors to keep their margins is to create scarcity.
It's about time that foreign companies learned that in order to do business in a country, you follow the laws of that country.
Google and Yahoo claim to do that when they shop their customers to the authorities.
Amazon is just one more American company that thinks the world is the USA. It isn't. France is incredibly _consumer_ friendly in both price and practice. They defend the consumer, not the businesses. Fresh food? No problem. I can safely eat raw eggs or meat in France, even if purchased in the centre of Paris. Wouldn't dare try that in the UK or USA. Good food? Everywhere I've visited so far in that country. Decent prices? Books, as others have mentioned, generally cost significantly less in France. There is also a much wider choice of books from large or small publishers, along with a wider variety of topics and styles. Unlike, say, the USA or the UK where only a few major publishers currently survive. Just about every bookstore I've visited in either country, apart from the second-hand or speciality stores, has pretty much exactly the same monotonously uniform selection of formula books. Forced bundling of software? Well, the courts have found against that disgusting anti-consumer practice as well.
Vive la France! The UK and the USA have a lot to learn from that grande dame about how to protect the consumer, not the enterprises that would feed on them.
As a few folks have mentioned above, the little old book store that stocks everything including the obscure will always get my vote.... support the local business etc but imagine the world in 20 years time if every large corporation takes over - go and watch Demolition Man or something and imagine the world if the only restaurant was Taco Bell, then picture it that instead of a little shop selling books you buy everything from a huge hypermarket or online - it saddens me a little.
On the flip side, as a consumer, paying a fair price is always preferable. IF the French Government actually bothered to look at the sales they'd probably see that whilst i'm sure Amazon are doing well, the little old store is probably still fairing ok.... but they may also notice that consumers want the best deal, and that might come from paying less for the same product.
I'll take quality of life (nice bookstores, good food, Parisian cafe) over standard of living (Amazon, McDonalds, Starbucks) any day. And I'm willing to pay more for it, as I know I have to.
And re French laws - If they want to do business there, they must follow them. Flouting the law there (as anywhere) will not come cheap. And it's nice to know that even in the Silicon Valley in the US there are good friendly walk-in bookstores with in-store cafes. But enough people have to have enough money and time to support them. Even after the monopoly comes in, some little place will pop up and compete - find them and buy from them.
"If objective elements prove that a book was edited or printed in the EU only to avoid being in the scope of the law, but are mostly imported in France and not sold elsewhere, then the importer must comply with the fixed price law."
If I, in France, buy a book from Amazon UK, who is the importer? Me. So the French courts are gling to sue me for non-respect of the law because I bought something from another EU country at a discount? I would *really* love to see that one come to trial in the European Court :)
A simple reality check would have shown you this has already been subjected to the EC courts ; search for case C-9/99 and the ruling dated 3 october 2000. The law has been validated by the european judges as a whole.
Anyway, feel free to try setting up this kind of business ; the amazon.fr case took 7 years between the first infringement and the judgement. That leaves plenty of time to pile up money to fend for yourself, and I wish you good luck. But as I pointed out, local prices are already way cheaper than the one you're accustomed to at home, I honesly can't see how you would manage to recoup the necessary investment to export books *cheaper* than they will cost you before shipping.
There is a clear consensus in France about this law : consumers, editors and retailers (even big chains) mostly agree that the law is good for business. It's not because it's a dogma, it's because after 10 years of various regulations in the 70s, where even a completely free market was tried with catastrophic results, the current law was negociated between all the parties involved, and the system has been working to the satisfaction of everybody ever since.
I think you misunderstand the point I am making (and for information 'home' for me is France, not too far in fact from Echirolles, referred to in case C-9/99. I know the Centre Leclerc well).
That case specifically refers to the situation of import of books *for sale*. In that respect the law has been tested and upheld.
My point was that if I, as a private citizen in France, import a French book from another EU country for my personal use, I cannot (and should not) be prevented from paying the price in force in the country of supply. e.g if Amazon.co.uk choose to sell me "Asterix chez les Bretons" en Français for 6 euros, well below the 8.46 euros fixed as the French legal minimum, I am breaking no EU law by buying it. Therefore, if Amazon chose to close their French operation entirely, and operate Amazon.fr from some other jurisdiction, I see no way in which restrictive French law could be applied to the situation, other than by prosecuting every individual purchaser as an importer, which I think would be ridiculous and thrown out by the courts. Additionally if they operated from the UK, they would be spared the cost of French VAT, which would offset shipping costs.
As for people agreeing it's good for business, permit me to be sceptical. If that were the case then obviously no-one would buy at a discount from Amazon.fr. This is the same myth used by booksellers in the UK who protested that the removal of the Net Book Agreement would make it impossible to buy anything but classics and bestsellers. The reverse has happened, the tiny High Street bookshops with knowledgeable staff and very small stock may not be physically present but their trade is booming thanks to the web with eBay and paypal. They have a much larger market, and no need to pay High Street rents for what was essentially a stockroom, and there's no shortage of specialist and minor-market books around. You can also still go into larger bookstores like Blackwells, Foyles, Waterstones/Borders in the UK, Decitre in France etc. and find knowledegable staff to discuss all sorts of books.
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