Amazon Charges Penny for Shipping Following France Ruling Shipping Cannot Be Free; "No Competition" Laws

Under "unfair competition" laws France has decided it is far better for consumers to pay full price for goods than to receive a discount. Striking out at Amazon, France passed a law dubbed the "Anti-Amazon Law", that banned free shipping. Amazon's response was to charge a penny, but sadly it can no longer offer discounts on books.

The Wall Street Journal reports Amazon Shelves French Book Discounts.

Amazon.com Inc. ended all book discounts in France on Thursday, and began charging a token penny for shipping books, bowing to a new French law aimed at protecting local bookstores from what they had described as “unfair competition” from the U.S. online retailer.

The new law, which went into effect Thursday morning, essentially forbids online booksellers from applying government-regulated discounts to the cover prices of books. They can mark down shipping under the new law--often called the “Anti-Amazon” law--but they cannot offer it free.

The new law is the latest step by European governments--particularly France’s--to rein in what they see as the growing power of a group of largely American tech companies. The French government said last month that it aims to propose new regulations at a European level to ensure a “level playing field” for European companies against U.S. firms.

Amazon has been under particular pressure lately. The European Union is looking into its tax arrangements in Luxembourg. In Germany, its unions have been striking over wages. The company is also in the midst of a bitter dispute with Hachette Book Group, part of France’s Lagardère SCA FR:MMB -3.44%  , over e-book pricing, in which its negotiating tactics have included removing preorder buttons on coming Hachette titles.

"Publishers and bookstores are organizing against the unacceptable commercial pressure exercised by Amazon," France's main bookstore association, which had lobbied for the new law, said in a statement. "We have repeatedly denounced the 'dumping' and unfair competition by online retailers, particularly Amazon."

Books and bookstores have long been a cause célèbre in Europe, where many countries including France and Germany regulate book prices. The underlying law modified on Thursday dates back to 1981, and forced vendors to sell books with a maximum discount of 5% off the cover price. The law aimed to protect France's still vibrant array of smaller bookstores against bigger chains, though they are now starting to hurt.

No One Looks Out For the Consumer

Who is watching out for the consumer? Answer: no one. When you reward inefficiency, ineptitude, and rudeness, the result is more inefficiency, more ineptitude, and more rudeness.

People who have to pay more for books, have less money to spend on something else. And if they feel books are not a bargain, they don't buy them.

France supposedly wants more tourist dollars. Good luck with that, when everything is overpriced and the government tells store owners what hours they can or cannot be open.

Petition of the Candle Makers

Ironically, French economist Frederic Bastiat lampooned protectionism back in 1845 when he penned 'Petition of the Candle Makers', mocking the sun's "unfair trade advantage" over candle-makers.

We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us.”

"No Competition" Laws

"Unfair competition" laws should be called what they really are: "No competition" laws, complete with higher prices, poor service, and higher unemployment.

What's next? Outlawing Kindle? Taxing eBooks as "unfair competition" against "real" books? What about taxing those who use free solar energy instead of candles?

With France, one never knows.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com