Plus ça change, plus c’est la même chose

by on January 20, 2008 at 9:46 am in Economics | Permalink

A French court has ruled in favor of the French Bookseller’s Union that Amazon’s free shipping policy violates a law forbidding booksellers from offering discounts of
more than 5 percent off the list price.
Amazon was told to start charging for shipping within ten days or pay a
daily fine. It must also pay €100,000 to the French Booksellers’ Union.

Amazon CEO Jeff Bezos, however, is refusing to charge for shipping and is taking the case to the French public.  Way to go Jeff!  My advice?  Tell the state, laissez nous faire!

Hat tip to A Chequer-Board of Nights and Days.

1 heedless January 20, 2008 at 10:10 am

That should be “Laisser mes livres faire!”

N’est ce pas?

2 Barry Kelly January 20, 2008 at 10:26 am

The case isn’t nearly as clear cut as you seem to suggest.

I agreed with you in the first instance when I first saw the news, but after reading more comment I’ve changed my mind.

I know I find it a lot easier to find interesting books by accident – i.e., ones I wasn’t recommended or wasn’t specifically looking for, or are out of print – in physical bookshops, particularly second-hand bookshops. What if those bookshops become unprofitable because relatively high volume recommended books (e.g. college texts) and bestsellers are sold at a discount by large corporations (such as supermarkets), or online?

Amazon’s recommendation system is both the best and worst thing about it: it’s the worst because it’s precisely where it’s weakest in comparison to the physical store, yet it’s strongest, because it’s a focus of development that sets it apart from the field.

3 Alex Tabarrok January 20, 2008 at 10:41 am

Martin, corrected – although sources differ on what was actually said.

4 Chris January 20, 2008 at 11:17 am

Brick and mortar bookshops in big cities are doing well. I’m not worried about them.

Small booksellers are just delaying their inevitable transition into the only activity for which they stand to have a comparative advantage, ie expertise and advice.

The original idea for the “unique price” for books was to promote the existence of a vast distribution network, based on independent retailers. The intention was also to prevent predatory pricing strategies and excessive concentration in the industry. We all know what economic theory tells us about that. The law, however, is now over 25 years old, and in desperate need of renovation to account for what is without doubt the biggest innovation in book distribution in recent years, e-commerce.

I’ve read some comments on the Amazon petition from people afraid that concentration in the hands of Amazon would lead to higher prices but – get this – a lack of selection, death of culture and the ultimate reign of the bestsellers list. As of now, Amazon is the only place I can get the books I want. Small bookshops just can’t afford to stock them, big bookshops don’t want to, and complete lack of selection is only found in our “grandes surfaces” (where a disconcertingly high proportion of people buy their books..). Another interesting comment was that small independent retailers don’t charge shipping for books you ask them to order.

Obviously things aren’t that simple either but basically, Amazon’s fault is being on the Internet.

5 Norikazu January 20, 2008 at 11:24 am

What was supposed to be a law written to protect booksellers from the competition of supermarkets and hypermarkets is now used to protect booksellers from the evolution of the cultural industry (books are sold at a fixed price, discounts greater than 5% are forbidden).

I used to support this idea when the competition came from large corporations that where susceptible of reducing the offer of available books.

Now, Amazon has more references than any physical store could offer (as far as I know). Most of the books I buy are in the long tail and I would have a hard time to find them elsewhere than amazon.

So, applying this law to protect the diversity (we call it the “exception culturelle” in France, meaning that culture should not be left to the laws of the market; other measures include subsidies given to French movie studios…) is not really meaningful anymore.

Moreover, between the lack of competition for French booksellers and the low exchange rate of the dollar, books are often 2 to 3 times cheaper If you buy them in English instead of in French.

6 Anonymous January 20, 2008 at 12:11 pm

So Amazon has to pay a one-time fee of €100,000 and €1,000 a day in daily fines? If I were Jeff Bezos, I would charge it to my advertising budget and rejoice.

7 nu January 20, 2008 at 12:41 pm

i’m with Norizaku, the law made sense when it defended cultural products from generalist big distribution pricing and helped mantaining diversity of offer.
but amazon doesn’t have a limited shelves policy.

The Virgin Megastore on the Champs-Elysées spent its first year or two paying a weekly fine for opening on sundays until they and other retailers (or rather other areas) got derogations.

8 LemmusLemmus January 20, 2008 at 1:40 pm

Thinking of it, does it make sense that Amazon is forced to charge the customer for the shipping cost but that the book store is not forced to charge the customer for the cost of shipping the book from the wholesale to the store (which the book store pays for indirectly)?

9 The other Eric January 20, 2008 at 3:17 pm

Do no French people read Bastiat? (By the way, can someone point me to a good English translation of The Law? The online version seems old and stilted.)

The fear of online bookstores destroying real bookstores is based on the obvious changes to commercial information markets. Fewer bookstores represents a change, and a gain not a net loss, to the amount of information available to us.

We are moving to a new type of communication, beyond mass or interpersonal communication to coalescent communication. Coalescent communication is the interaction between you and the aggregated, choice-selected media available in large scale information systems. My Netvibes pages brings me a selection of blog postings, images, video links, and news pages based on my selection criteria. As online systems are better integrated this will become more automated, based on my searches and page clicks rather than me having to make raw selections. It will go well past ‘if you liked this book then you’ll really like…’

Bookstores will still exist; Every form of the media still does. I can still buy carved stone tablets– a medium over 14,000 years old. But the actions of a nationalist commercial cartel hoping to stop the tide of changing information markets will be as successful as me becoming younger instead of older this year.

10 James January 20, 2008 at 3:41 pm

Note to self: buy more books from Amazon.

For some years the garden centres in New Zealand have had a similar battle going with the government over holdiay trading laws. You see in New Zealand it is illegal for most businesses to open on Easter Sunday, and this is a populat time for gardening (its generally one of the last good patches of weather before winter).

For years several garden centres have opened anyway. Every year they are busted, sentenced to the maximum fine and gladly pay it, as they make far from from opening that day than the cost of the fine.

11 Chuck January 20, 2008 at 6:52 pm

The problem with the French is that they have no word for “entrepreneur”.

12 Chris January 21, 2008 at 2:31 am

The more things change, the more they stay the same.
(the more it changes, the more it’s the same).

13 Andrew January 21, 2008 at 6:38 am

“I’m not sure you meant to say this. If the cost of the book is relatively insignificant to you, it should to matter whether it costs $10 vs. $15. I believe you would prefer a high cost and an extremely large variety that would allow you to choose a book that more fits your needs/wants.”

I did mean it, though I admit I didn’t communicate what I meant very well. What I am saying is that, similar to a recent post on this site, I don’t consider a high cost (or popularity) to equate or correlate to quality. Amazon, by being a low cost provider, is able to provide a high variety AND a low cost. So, if I get a few cues that a book is going to be good, but if it costs $15, I still might not buy it, because I can get another book for $15 bucks that I have even more cues will be a great book. But, if I can get 3 books for $30 rather than 2 for $20, I’m more likely to give the third book on my priority list a try.

Basically, the cheaper and easier it is to get books, the more books of all kinds will be had. Innovation will do more to support the long tail than legal interventions.

Another thought. Popularity of a book, to me, is only a positive cue for fictional works. There is a network affect with fiction because people want to be able to talk about the same books at their dinner parties. I don’t much care about fiction books myself, or at least their popularity, but it seems like trying to fight this effect is misguided. Popularity for non-fiction books is more of a long-term cue. For example, it may take 50 years for the top book on a subject to rise to the surface. Although I am certainly not implying we need a bureau to decide and enforce the top book on a subject (it has to be worked out in the market) making sure there is a lot of variety in non-fiction books, where my main concern is more having the best source rather than a lot of sources, is counter-productive.

14 Patrick January 21, 2008 at 6:27 pm

The Virgin Megastore on the Champs-Elysées spent its first year or two paying a weekly fine for opening on sundays until they and other retailers (or rather other areas) got derogations.‘ – many in the outer suburbs still do.

I don’t really understand the workability of this law. What if the authors of this website wanted to clear out their inventory? Would they not be allowed to discount their books?

ha, hell no, they wouldn’t. They would have to go to the prefecture and ask permission, which would be granted in case of liquidation, disaster or major renovation, or for a kickback. see this for more!

15 租車 September 26, 2008 at 3:25 am

Amoy abroad heard a 中古車very easy everywhere, there really want to own a car, even if it is 二手車required. This need not employed by the租車 company. The information in this regard, please email me.

16 花蓮租車 February 4, 2009 at 4:45 am

Comments on this entry are closed.

Previous post:

Next post: