France moves to protect its book industry from Amazon

  • New legislation will impose a minimum shipping fee on new books
  • Amazon delivers books for 1 centime in France
  • Says legislation will punish them in rural areas
  • Paris says law needed to regulate “distorted competition”

PARIS, October 25 (Reuters) – Sophie Fornairon’s independent bookstore has survived Amazon’s boom thanks to a French law banning discounting on new books, but she says the e-commerce giant’s ability to undercut shipping is still skewing the market relative to stores like her.

Fornairon, which owns the Canal Bookstore in central Paris, now hopes that new legislation that will set a minimum price for book deliveries will even further the competition in the battle between neighborhood stores against Amazon (AMZN.O).

“It’s a fair return to a level playing field,” said Fornairon, who employs four workers. “We do not risk shutting down at some point, but Amazon is a constant battle.”

Amazon said the legislation, which has been passed by parliament but has not yet been passed, will penalize those in rural areas who cannot easily visit a bookstore and rely on delivery.

“Imposing a minimum shipping cost on books would weigh on consumers’ purchasing power,” Amazon told Reuters in a statement.

It is an undesirable consequence that government officials are wary of at a time when President Emmanuel Macron’s administration is struggling to stave off growing dissatisfaction with rising energy prices six months after an election.

In the land of Victor Hugo and Simone de Beauvoir, where local booksellers are held with special devotion – they were considered ‘essential businesses’ during the latter COVID lockdowns – the latest move by the state to protect national culture from large technology companies has taken off.

More than 20% of the 435 million books sold in France in 2019 were bought online, and the market share of France’s 3,300 independent bookstores is slowly declining due to competition from online retailers such as Amazon, Fnac (FNAC.PA) and Leclerc.

Macron support helped push the legislation, which is not targeted at Amazon by name, across the line. The minimum fee still needs to be negotiated with the regulator.

‘Distorted COMPETITION’

French law prohibits free book deliveries, but Amazon has circumvented this by charging a single cent. Local bookstores typically charge around 5-7 euros ($ 5.82-8.15) to ship a book.

Sophie Fornairon, owner of the “La Librairie du Canal” bookstore, posed during an interview with Reuters in her bookstore in Paris when French lawmakers voted in favor of a draft bill aimed at preventing Amazon from offering free delivery of books and protecting traditional bookstores against competition, France, October 21, 2021. REUTERS / Sarah Meyssonnier

Amazon’s pricing strategy had resulted in the growing market share for a single operator, the Ministry of Culture said.

“This law is necessary to regulate the distorted competition in online book sales and to prevent the inevitable monopoly that will arise if the status quo persists,” the ministry told Reuters.

Center-right Senator Laure Darcos, who drafted the law, opted for the minimum delivery charge when she observed how bookstores maintained 70% of their business despite being forced to close during early COVID lockdowns because the government reimbursed shipping fees.

“It showed what a brake on business, postage costs are for local bookstores,” Darcos said.

Amazon had lobbied hard against the legislation and was concerned that the French move could set a precedent, the senator said.

France’s bookstores are concentrated in cities. Amazon said online book sales had made it possible for consumers to have equal access wherever they lived.

Almost free delivery made it possible for book lovers in rural areas to buy books for the same price as someone who could go into a bookstore – precisely the spirit of the 1981 law, it said.

When asked when the legislation would be passed, the Ministry of Culture refused to give a date, saying it was too early to say.

For Fornairon, the bookstore owner, the constant flow of American tourists through her door was a constant reminder of the shield French law had already wrapped around shops like hers.

“They say to me, ‘we did not even know that independent bookstores still existed,'” she said.

($ 1 = 0.8593 euros)

Reporting by Elizabeth Pineau, writing by Richard Lough; Editing Emelia Sithole-Matarise

Our standards: Thomson Reuters Trust Principles.

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