E-commerce giant Amazon (AMZN) was hit last week in France, after French lawmakers aimed to protect local bookshops from online booksellers. The newly passed law, which still needs to clear the Senate, bars online booksellers from offering free delivery to customers, as well as capping discounts at a maximum of 5%. The law reflects other anti-discounting measures in the country, which started in 1981 under the Socialist government which intended to protect smaller bookshops from large supermarket chains.
Over the past decade, French publishers have protested Amazon’s “unfair competition” which was forcing them out of business. In France, online book sales rose to 13.1% of total book sales in 2011, up from 3.2% in 2003. There are still far more bookstores in France than most Western countries, which has 2,000 to 2,500 for a population of 65 million, compared to the 1,000 in Britain, which has nearly the same population.
Amazon responded by stating that the law would hurt sales of books from smaller publishing houses, which did not have the distribution networks of larger publishers. Amazon is facing problems of its own in the United States, where it has battled against Apple (AAPL) and the Department of Justice over price-fixing claims.
However, Amazon isn’t alone in being targeted by the French government. France’s data protection watchdog recently edged closer to fining Google (GOOG) over its data collection and storage practices, claiming that the search giant failed to comply with a three-month ultimatum to change its business practices in the country.
The French government has also requested the European Union to improve the regulation of large global Internet companies like Amazon, Google, and Facebook, to discourage the dominance of e-commerce and other online services. The French government is also pushing for tighter tax regulations, so companies cannot move their headquarters into lower-cost EU countries. Amazon and Google are both facing ongoing tax audits in France as well.
Regardless of its European problems, Amazon is still moving ahead in the United States with its ambitious plans to challenge a wide variety of companies. Amazon is currently targeting Netflix with its original programming, streaming content, and upcoming set-top box similar to Apple’s Apple TV. The company is also going after the smartphone market with an upcoming smartphone, and recently rolled out a new version of the Kindle Fire, the HDX — a lightweight, high-powered unit designed to rival Apple’s iPad.
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