Amazon.com, Inc. (AMZN): In France, It’s Bad to Have Prices Be Too Low

Amazon.com, Inc. (NASDAQ:AMZN) is one of those companies that has made billions of dollars over the years by understanding the forces of the free market. In France, its socialist government (this is not an opinion; the government is led by the Socialist Party of Prime Minister Francois Hollande) is so business-friendly that it tries to legislate  any free-market forces that might give a retailer a decided advantage over others – even if consumers lose out on saving money.

There is a very interesting economic and political story coming out of France now, as Amazon.com, Inc. (NASDAQ:AMZN) is now being targeted for legislation because it offers its French customers free delivery along with a 5-percent discount off a book publisher’s suggested retail price (retailers are not allowed to discount books more than 5 percent – yes, it’s an actual law). This amounts to “bundling,” and it undermines other book retailers who cannot afford to offer similar discounts – especially small retailers who are in market competition with large retailers like Amazon.com.

“I’m in favor of ending the possibility of offering both free delivery and a five percent discount,” said Aurelie Filippetti, the French culture minister. “We need a law, so we’re going to find a legislative window to introduce one.” The law would be introduced to prevent what the French government would consider an anti-competitive act by a retailer to offer discounts and specials so large that no other retailer can absorb in order to remain in business – which has been the business model for Amazon.com, Inc. (NASDAQ:AMZN).

“Today, the competition is unfair … No other book retailer, whether a small or large book or even a chain, can allow itself to lose that much money,” said Guillaune Husson of a French book retailers’ union. (Yes, there is a union for book-retail stores in France.) The union had already sued Amazon.com, Inc. (NASDAQ:AMZN) in the past for unfair competition focused on free delivery. That, plus te 5-percent discount means  that book retailers would have to sell their books at a loss to be competitive – and they can’t afford that, Husson said.

What do you think? Should the concern of the French government be on keeping businesses competitive, or allowing consumers to save money wherever they can? What would you think if there was a law in the U.S. that prevented Amazon.com, Inc. (NASDAQ:AMZN) or some other retailer from offering multiple discounts? We’d like your feedback in the comments section below.

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