I’m a big Amazon user. I think it’s a lazy guy thing. I know what I want, I don’t want to window shop at the mall or go to the hassle of actually driving and parking and wandering around in the mall lost (and I don’t even have any kids). What really got me using Amazon big time though, was their Amazon Prime program where you pay $79 a year for free shipping on everything sold by Amazon (though not some third party sellers). It’s simply a great site, great idea, and has completely revolutionized the way I shop.
France, however, doesn’t see it the same way. Michael talked about France’s aversion to capitalism and the free market a few days ago, and now we see it in action. France has declared free shipping illegal. In 1981 France passed a law making it illegal for book sellers to offer more than 5% discount on the list price, (who wants big discounts on books right?). This was done to protect French book stores from competition from supermarkets and other new retailers. Amazon.fr has run into trouble with their offering free shipping on orders of €20 or over (it’s $25 in the US), and a court has ruled that this violates their protectionist law.
Amazon, however has opted to continue offering the free shipping, and is choosing to violate the law and pay the €1,000 a day fine. After 30 days though, the court can revisit the fine and will undoubtedly increase it greatly given Amazon’s open defiance of it. It also owes €100,000 to the French Booksellers’ Union for the court battle and for the losses it has apparently caused them. Imagine if Dell was forced to pay HP for the losses it cause them with their new computer manufacturing model. Doesn’t really spur lower prices and innovation does it?
So who is hurt by this? Amazon obviously, but also the consumers in France, who have plenty of time to read with their 35 hour work week. According to Cédric Manara, a law professor and e-commerce specialist at Edhec, a French business school in Nice, Germany has a similar law regulating the price of books, but Amazon.de remains unaffected. But I wonder how long that will be true given what’s happening in France.
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