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Amazon.com's French subsidiary has recently lost a court case concerning its practice of providing free shipping on book deliveries inside France on orders worth more than 20 euros. A lower court has ruled that the company is in violation of French law and has ordered Amazon.fr to cease this practice. The lawsuit brought on by the French Booksellers' Union last December requires the company to pay damages amounting to 100,000 euros as well as imposing a fine of 1,000 euros per day until it has fixed its illegal practice of providing free shipping to its customers. (Source: dailytech.com)
The 1981 Lang Law requires the selling price of all books be placed on the cover by the publisher, and that a retailer is only allowed to deviate 5% below that posted price. The court has determined that Amazon.fr regularly violates the Lang Law by providing free shipping, which brings the retail cost of the book down by more than the 5% allowed by French law. This law was designed to prevent independent bookstores from being forced out of business by large retailers who sell their products at significantly discounted prices, and quite often for a net loss. (Source: realtechnews.com) The director of Amazon's French subsidiary, Xavier Garambois stated, "We are determined to follow every avenue available to us to overturn this law." The insignificant fine of 1,000 euros per day is dwarfed in comparison to Amazon's $3 billion in third-quarter revenue, as such the company has opted to pay the fine as it attempts to appeal this decision. However, the sum of the daily fine is to be recalculated after a period of 30 days, and Amazon.fr's defiance of French law may lead to a significant increase to that number. (Source: iht.com) Cédric Manara, a law professor and e-commerce specialist in a French business school in Nice, commented that Amazon "had no chance" of success in its appeal due to the wording of the Lang Law. In addition to appealing the court decision, Amazon has posted an online petition where customers can demonstrate their support for the company. (Source: iht.com)
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