In a fresh jab at the e-commerce giant, France steps up to bring down Amazon from offering virtually free delivery for book purchases. The near-zero cost charged on deliveries is one of the online platform’s major selling points against traditional bookstores.
The draft law, produced by the Senate has President Emmanuel Macron himself supporting it. aims to protect brick-and-mortar shops from the competition with Amazon, which has left them reeling. The main objective of the draft is to provide support to the conventional brick-and-mortar shops which are competing with Amazon albeit unsuccessfully. The move comes as the latest development in a series of moves intended to bolster the local culture against foreign tech firms. Some of the actions taken by France for the aforementioned purpose are supporting press publishers against Google and Facebook and backing TV broadcasters against Netflix.
Géraldine Bannier is an MP from the allied party MoDem, and in charge of the bill in the lower house. Bannier said in an interview, “The objective is to reduce the distortion of competition between online players who can offer book deliveries at one cent, and the others,”.
National Assembly’s culture committee will be reviewing the bill on Wednesday. Since, the proposal requires the charging of a minimum rate for book deliveries, if passed Amazon’s promise of almost free shipping for books would become illegal in France.
Multiple French officials reported that Amazon was lobbying against the proposed rules as the American e-commerce giant is opposed to the bill.
There have been numerous incidents in the past where the french politicians have shown support for independent bookstores against the U.S. tech company. Paris Mayor Anne Hidalgo described the tech company as “the death of bookshops” while some have even called for Amazon boycotts.
France’s 3,300 independent bookshops have reported a reduction of around 3% due to the competition of online retailers such as Amazon and Fnac during the time span between 2006 to 2019. Bookshops had to be closed during the first lockdown imposed because of the pandemic, however, they were categorized as “essential businesses” at the start of 2021 and were permitted to remain open. France is no stranger to the regulation of the book sector.
France has been following a “single book price” law. A law that lets publishers decide on the prices of books based upon which the distributors then set their own price between a window of 95-100% of the price decided by the publishers.
In addition to this rule, free deliveries are technically impermissible. Policymakers are now of the opinion that having a wide range of delivery rates — from €0.01 to up to €7 depending on the distributor — is defeating the law’s purpose of having only one price for books.
The new bill would require retailers to charge for delivering books at a minimum price which will be determined by the economic and culture ministries. The ministries will set the price based on a proposal by Arcep, a telecom and posts regulator. The bill will also require online platforms to clearly differentiate between new books and second-hand books.
Senator Laure Darcos, who has prior experience working in the book publishing industry drafted the bill. She said,”It wasn’t an easy choice, because we make consumers pay again,”.
Emmanuel Macron is one of the most important supporters of the bill. Macron said there was a competition issue between multinationals and independent book stores.
The bill is targeted primarily at Amazon, which successfully built a global empire by providing cheap and fast delivery.
Culture Minister Roselyne Bachelot commented, “It is a well-known fact that this operator’s strategy is to sacrifice its profitability in order to conquer the market through aggressive pricing policies. It compensates its losses by offering other services, which amounts to making the book a loss leader,”. He also added that the bill’s primary objective was “directly contradicting this strategy.”
And Amazon has unsurprisingly pushed back against the new rules.
As expected, Amazon has opposed the bill. Darcos said,” Amazon is afraid that it will set a precedent. They want to be monopolistic on the online sales of book — I press where it hurts,”.
According to multiple officials, the e-commerce giant presented an argument that higher delivery rates would be detrimental to rural areas that are already lacking proper access to physical bookshops. Amazon further argued that higher rates would prove beneficial for the e-commerce giant only as it would generate higher profit margins for them.
The new rules proposed in the bill have the backing of not only the Syndicate of French bookshops but also companies such as Fnac and Leclerc who are rivals of Amazon. These rival retailers support the bill as they have been forced to reduce their delivery fees and nibble on their profit margins in order to provide competitive rates against the U.S. tech giant.
The bill will be presented in the National Assembly’s session scheduled for early October.