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October 04, 2013

Amazon Was Likely Target of Action by France's National Assembly

By Ed Silverstein, TMCnet Contributor

France’s National Assembly has approved a proposal to stop allowing Internet book sales sites, which provide a discount on the price of the book, from also providing free delivery to customers.

The bill will likely get approved in France’s Senate, later this year. The bill was actually an amendment to a 32-year-old French law.

Many see Thursday’s move by the National Assembly as targeting Amazon, which is based in the United States. Amazon offers consumers books at a discount of 5 percent, and provides free shipping.  




In fact, the French Culture Minister, Aurelie Filippetti, claimed Amazon was "dumping" in the marketplace, and would increase delivery prices after local bookstores were destroyed,
Bloomberg (News - Alert) News reported.

As of now, 17 percent of book sales in France are from online businesses, news reports said.

Also, online book sales in France were 3.2 percent of total book sales in 2003. As of 2011, they increased to 13.1 percent of total book sales.

France saw its book sales edging down by 4.5 percent last year, when contrasted to book sales in 2011. 

Some people are not supportive of the approved bill. For example, Pyroclasm wrote on Engadget, “This is stupid. So they ban online retailers from the free shipping option on discounted books. So say shipping is 6 dollars. They just cut an additional 6 dollars off the already discounted price of the book and voila (like how I added some french in there) same deal to begin with.”

Yet, there are some people who support the move.

For instance, LudovicFermy wrote,“France wants to protect its culture…. The Government wants to protect the shops that are spreading culture, that's all. In France the market can't do everything at any price, it's People first.”

The decision to go after companies like Amazon was supported by both the Socialist Party and the opposition UMP party – which is rare for the usually divisive Parliament,
France 24 reports.

In response to the action by the French government, Amazon said it will be the consumer who will get hurt.

"Any measure aimed at raising the price of books will only reduce French people's spending power and introduce discrimination against online consumers," the company said. “All measures that aim to raise the price of books sold online will curb the ability of French people to buy cultural works and discriminates against those who buy online.”

There was speculation that any new law could be challenged in French courts.  

Amazon now reports its European sales via a holding company in Luxembourg. It claims avoiding taxes this way is legal in the European Union, the AFP reported.

In addition, Amazon is just one of the targets of the French government. Other Internet-focused companies such as Google, Apple (News - Alert) and Facebook are increasingly a focus of French regulators, who are very aware that the firms pay little taxes in France and are dominant in the sector.

 

 




Edited by Stefania Viscusi
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