Vive la (Online Bookstore) Révolution!
By: Daniel Castro
Some of the French proposals for regulating the digital economy have become so outlandish that it is getting hard to distinguish between real articles printed in Le Monde versus ones you might find on a satirical website like The Onion. The most recent example of this type of head-scratching headline came this week when French legislators met to consider a law, which has the backing of President Emmanuel Macron, to require retailers to charge consumers higher shipping fees for books they purchase online than most pay now.
While most elected officials are usually concerned about consumers paying too much, French lawmakers are apparently worried that consumers are paying too little for books. They argue that their concern is justified because France’s 3,000-plus independent bookstores cannot compete with online retailers who offer more convenience and selection, especially if they have to compete on price too. As Géraldine Bannier, an MP in charge of the bill noted, “The objective is to reduce the distortion of competition between online players who can offer book deliveries at one cent, and the others.”
It is unclear how firms selling goods for a lower price because they are more efficient is a “distortion of competition” since that is exactly how competition works for every other business. By that logic, you might argue, all bookstores in France should be required to sell books for the same price. After all, how else could a one-person bookseller compete on price against a larger bookstore that can more efficiently manage inventory and staffing? But if you think that line of reasoning would hold much sway in Paris, the French government is already way ahead of you — back in 1981, the government passed a law requiring all booksellers to sell books for the fixed price established by publishers. The maximum discount that booksellers can offer consumers is 5 percent off the list price. At least grant the French some credit for consistency.
And as absurd as this new legislation to establish minimum shipping fees for books might sound, it isn’t even the first time France has legislated book shipping costs. Under a previous law passed in 2014 (dubbed the “Anti-Amazon Law”), the French government prohibited free home delivery of books. Most online sellers comply with this law by charging a nominal fee, including as low as one cent (Bonjour Amazon!). This new legislation is intended to take another crack at these dastardly online competitors who have dared to offer French consumers a good deal.
The irony is that French policymakers have been bemoaning what they see as a lack of competition in the tech sector. Yet when online businesses compete with a large market of established firms by offering consumers more convenience and more selection, the government moves to stop those competitors dead in their tracks. Indeed, another provision of the proposed law would specifically allow French municipalities to subsidize their small and medium-sized bookstores — in other words, taxpayers would be subsidizing local bookstores, even if they don’t buy books from them. How is that creating a level playing field? French policymakers cannot claim the mantle of competition champions if they refuse to accept the results or put their fingers on the scales when they are unhappy with the results.
Defenders of French culture would argue that these independent bookstores are a quintessential feature of French society, and therefore they need to be preserved, no matter the costs. But French consumers do not seem to be buying what these bookstores are selling. After all, the purpose of the new legislation is to establish a minimum shipping price so that these independent bookstores can afford to ship books to consumers buying online. What is the point of preserving neighborhood French bookstores if they are now just the site where workers are packing up books to ship to their online customers?
Finally, none of these measures can address the elephant in the room — e-books. While many readers still prefer printed books to e-books, the volume of e-book sales continues to grow and has only accelerated during the pandemic. Eventually, e-book sales will likely eclipse printed books — just as music stores and video stores have given way to digital delivery, so too will books. Raising costs for book deliveries may keep these bookstores around a while longer, but it will not delay the inevitable. While France has already established some price controls for e-books, including rules that made Amazon create a separate e-book subscription service in France versus the rest of the world, French legislators have not been able to stop e-book entirely.
Rather than trying to halt progress, French lawmakers should use the opportunity that digital offers to embrace new goals: lower carbon footprints, more affordability, dynamic pricing, and greater access to knowledge. Unfortunately, so far, that seems unlikely. French policymakers have no clear plans for saving its bookstores once e-books become dominant, but if history is any lesson, whatever they decide to do should make for a good book someday.