Mike Shedlock

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.

Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.

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