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France targets Amazon to protect bookshops

Lionel Bonaventure | AFP | Getty Images

France's parliament has passed a law aimed squarely at US online retailer Amazon that will prevent internet booksellers from offering free delivery to customers, in a bid to protect the country's struggling traditional bookshops.

Aurelie Filippetti, the culture minister who originally proposed the move, denounced Amazon for its alleged "strategy of dumping," saying the company used offers of free delivery to get around French laws that control the price of books.

Speaking during the debate in the National Assembly, she said: "Once they are in a dominant position and have wiped out our network of bookshops, it is a strong bet that they will raise their delivery charges."

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The new law, which will now go for ratification by the Senate, is the latest move by France against big US internet companies, which it believes are unfairly using their market power to overwhelm local competition.

The Socialist government of President Francois Hollande is lobbying the EU to regulate digital platforms and applications and is pushing international efforts to reach agreement on taxing companies such as Google, Facebook and Amazon where customers use their websites.

Defending France's cultural assets against the perceived threat especially from US products and companies has strong cross-party support. All main parties supported the new law, which will be added to 1981 legislation that allows a maximum 5 percent discount on the centrally-fixed single price for books.

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Amazon attacked the new law, saying all measures that increased the price of books damaged the purchasing power of French consumers and discriminated against those shopping on the internet.

"The impact will be greatest both on the depth of the catalog [offered to consumers] and on small publishers for whom the internet represents a big part of their business," Amazon said.

But politicians on the left and right expressed concern about the fate of France's strong tradition of independent bookshops in the face of fast-rising internet sales, which captured 13 percent of the market by 2011, according to figures in a parliamentary report. Amazon claims some 70 percent of the online sales.

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The government combined with French publishers in June to launch a €9m joint plan to support independent booksellers. But Christian Kert of the centre-right UMP party, one of the sponsors of the new law, said bookshops remained "in a difficult situation because of their rents, personnel charges and the cost of their stocks."

He said Google, Apple, Facebook and Amazon between them had between €2.2bn and €3bn sales in France, but paid on average only €4m in tax each.

Earlier this year, Mr. Hollande forced Google into pumping €60m into the country's ailing newspaper industry by threatening to introduce legislation to force the search engine to share its revenues from links to French media articles.

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But another proposal to impose a tax on the sale of internet-connected devices to help fund French films and TV production has been dropped, at least for the time being.

— By the Financial Times' Hugh Carnegy in Paris