The amendment, unofficially dubbed the "Anti-Amazon" law, is intended to prevent online bookselling sites from dominating a French market of 3,500 bookstores, including 600 to 800 independent ones. Up until now, Amazon had been able to undercut competitors by offering free shipping in addition to a 5% discount, the maximum discount on books allowable by French law.
Now, however, offering free shipping for books is illegal, presenting a problem for online retailers who don't want to lose a significant French market of readers. Amazon's solution? Charge one cent for shipping.
Amazon France explains that due to the new law, "since the new law on online book sales we can, sadly, no longer offer free delivery for books plus the 5% discount,” according to The Connexion.
Amazon went on to say on its Frequently Asked Questions page, "We have therefore fixed delivery costs at one centime per order containing books and dispatched by Amazon to systematically guarantee the lowest price for your book orders," according to VentureBeat.
A centime is worth about 1.4 US cents. Since the law only prohibits free shipping, Amazon's strategy is technically legal.
Even though the site is no longer offering a 5% discount like traditional bookstores, it has another ace up its sleeve. By billing out of Luxembourg, a country known for its low sales tax rates, Amazon has managed to gain market share in France's bookselling market over the past few years, according to TechCrunch News. By charging only one cent for shipping, it can still undercut a lot of its competition.
Supporters of the law, which passed nearly unanimously last month by the National Assembly and the Senate according to The Connexion, will likely be disappointed by Amazon's one-cent plan.
Amazon wasted no time in implementing its new strategy. According to The Connexion, the law went on the books only a day before the announcement of the shipping plan. Fnac and Chapitre, two other major online booksellers in France, hadn't even gotten around to eliminating the option for free shipping on their books yet.
Weston Williams is a Monitor contributor.