Amazon Sued In Germany For Offering Good Prices On Books

from the how-dare-you! dept

I've never understood book price fixing laws in Europe, that require books to be sold at the same price. Economically challenged individuals claim that this helps independent booksellers who aren't forced to undercut prices of other book chains. Except, of course, forcing higher prices on everyone actually leads to fewer books purchased, less innovation and less opportunity for those independent bookstores to offer something better. These laws have caused trouble for Amazon in the past. Over in France, Amazon's famous free shipping promotions were deemed illegal for being an effective "price discount" on books. And now a bookseller is suing Amazon in Germany for supposedly violating fixed prices on books as well (found via Michael Scott). In this case, the bookseller is sick of people showing up with printouts from Amazon, and wants to force Amazon to offer higher prices, because apparently consumers must suffer.


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  1.  
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    Jan (profile), Dec 29th, 2009 @ 9:38am

    >>>book price fixing laws in Europe

    I am sorry... just to make it clear - Europe is not one country. I live in the Czech Republic (which is in Europe) and we don't have any "book price fixing laws in Europe".

     

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  2.  
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    Pangolin (profile), Dec 29th, 2009 @ 9:53am

    Who sets the price?

    Who sets the book prices? Publisher? Amazon? This independent?

     

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  3.  
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    Anonymous Coward, Dec 29th, 2009 @ 9:54am

    In much of Europe, the discount-pricing battle that has erupted among Wal-Mart Inc., Amazon.com Inc. and Target Corp. could never happen because most major publishing markets, with the exception of the U.K., are bolstered by laws requiring all bookstores, online retailers included, to sell books at prices set in stone by their publishers.

    According to WSJ: http://online.wsj.com/article/SB10001424052748703697004574497862933592856.html

     

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  4.  
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    The Infamous Joe (profile), Dec 29th, 2009 @ 9:57am

    Free Market?

    Why stop at books? (Or, re-worded, what makes books so special?)

    Why not fix the price of everything? That way independent [noun]-store owners won't have to undercut the prices of other [noun] chains.

    In related news, the more I learn, the more pity I feel for humans.

     

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  5.  
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    Anonymous Coward, Dec 29th, 2009 @ 9:59am

    Re:

    If there are any book price fixing laws in europe then this statement is false- we don't have any "book price fixing laws in Europe". What makes this false is that Germany is still in europe as of this morning.

    What you want to say is there are no European wide (ie EU) book price fixing laws.

     

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  6.  
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    The Anti-Mike, Dec 29th, 2009 @ 10:00am

    Mike misses it again

    Mike, what rich companies often do to enter a market is offer a product below the cost price, and basically bleed everyone else out of the market. If the net effects of Amazon's free shipping and such is to sell books far below cost, than the book sellers do have a good case.

    Almost every country (the US included) has regulations against dumping and bad faith competition.

    Oh yeah, Europe isn't a country, but you know that.

     

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  7.  
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    Overcast (profile), Dec 29th, 2009 @ 10:09am

    Why stop at books? (Or, re-worded, what makes books so special?)

    Why not fix the price of everything? That way independent [noun]-store owners won't have to undercut the prices of other [noun] chains.

    In related news, the more I learn, the more pity I feel for humans.


    Yeah, seriously.

     

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  8.  
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    Mike Masnick (profile), Dec 29th, 2009 @ 10:11am

    Re:

    I am sorry... just to make it clear - Europe is not one country.

    Er... I never said it was. But there are many countries in Europe, and plenty of them have book price fixing laws. Notice I said "laws" not "the book price fixing law in Europe."

    My statement was accurate. There are book price fixing laws in Europe. At no point did I say all of Europe is covered by a book price fixing law. My confusion was over why so many parts of Europe do have book price fixing laws.

     

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  9.  
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    John, Dec 29th, 2009 @ 10:16am

    "forcing higher prices on everyone actually leads to fewer books purchased, less innovation and less opportunity for those independent bookstores to offer something better."

    There is an intellectual argument to be made for fixed price laws. Some European countries have decided that having a variety of retailers, especially smaller local companies, is more important than pure economic efficiency. For sake of argument, let's assume that the result is that fewer books are purchased and there is less innovation. Is that always a Bad Thing? At some level of "less", it clearly is. But the real world question is how much is really being lost, and whether the gains are a worthwhile trade off. I'm glad I live in the US, where fierce price competition is the norm, but I can also see the advantages of alternate systems.

     

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  10.  
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    Lawyer Lance (profile), Dec 29th, 2009 @ 10:18am

    Re: Re:

    Also, these laws could be part of some EU legislation on commerce; then they are effectively pan-European laws.

     

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  11.  
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    Anonymous Coward, Dec 29th, 2009 @ 10:21am

    Re: Mike misses it again

    Anti-Mike, why not just pay more for everything?

    Seriously, when a company builds a monopoly to raise prices, you defend them. Here, a company builds a monopoly and you are upset? I genuinely think that your position is inconsistent.

    So why do you suddenly care about monopolies?

    Beyond that, are you saying that a company shouldn't ever take a loss to help out future profits? Once I was at a bar, and Michelob had an attractive young lady give me a T-shirt. Michelob is killing the T-shirt market, as well as my interest in less attractive girls.

    Are you saying that should be illegal too?

    How about if we just strengthen anti-trust laws instead? The best company wins out and society benefits, but once they reach a certain level of market share, the company can be split up so to ensure competition.

    Then you don't need price controls, and you don't need a book-tax on the public to keep independent book sellers in business.

     

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  12.  
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    Rosamunda, Dec 29th, 2009 @ 10:27am

    "Europe is not just one country"

    Please don´t be mad. North American people are very used to simply forget all about other countries and cultures.
    They even name themselves as "american" when they actually mean "united states citizen". America is not just one country also you know...
    No offense intended here, just wanted to criticize a bit of american culture now that I´ve got some time at my hands ;)

     

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  13.  
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    Matt (profile), Dec 29th, 2009 @ 10:29am

    Re: Mike misses it again

    While I know you are a troll, I am compelled to respond. To be sure, if Amazon were dumping you might have a point. In order to show dumping, you have to show selling below _the seller's_ cost, not below _any seller's_ cost. Amazon has remarkably low overhead. Books have very high markup. Amazon can cut into that markup without much affecting its profit, because its costs are very, very low. There is no evidence of dumping, here.

    As for bad faith competition, not only is there no evidence of it, the evidence is overwhelming that it is not present. Amazon offers free shipping almost everywhere it is permitted to, even where it is already the largest online retailer. No bad faith there.

    You may have meant unfair competition, also prohibited. If so, it generally requires false or deceptive conduct, including trademark infringement. No sign of that.

    The reason dumping is bad is because the prices eventually go up. The big ugly comes in, sells below (its) cost, and bleeds everyone else out. Then it finds or creates massive barriers to entry. Then it jacks its prices up to collect monopoly rents. If any step is blocked, BigCo loses. There are good reasons to feel that the right time to block BigCo isn't after it has given consumers the benefit of low prices, but instead when it starts to jack its prices. Blocking BigCo prior to that stage does not protect consumers, but incumbent businesses. And that answers Mike's question: some European countries have crazy price-fixing laws because they want to protect their incumbent, "old world" enterprise for cultural (not economic) reasons. They are simply (and consciously) valuing tradition over innovation. This is the same spirit that causes Boston to keep some streets quaint and narrow, the way they looked when horses and carriages roamed them, even if cobble makes no sense under tires.

     

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  14.  
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    tracker1 (profile), Dec 29th, 2009 @ 10:32am

    Re: Mike misses it again

    Amazon may not be selling below cost, but can still undercut retail shops, because they don't have a store front to maintain. Are you suggesting that online retailers should charge as much as store fronts? Wouldn't that mean they are able to be evil, and make excess amounts of money?

     

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  15.  
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    Matt (profile), Dec 29th, 2009 @ 10:35am

    Re:

    Totally agree with the premise. Small nit: fierce price competition is not the norm in the US. If it were, gas stations across the street from one another would change their price more than once a day. Lazy price competition is the norm, because it is good enough and can sometimes lead to favorable arbitrage.

    But the premise is dead on. Price fixing indicates a different valuation of innovation. That in itself is not bad - not everyone regards the next big idea as being an unalloyed good, especially since it may be highly disruptive. In the US, we have made similar choices in a number of places: railroads and highways, farms, and utilities (particularly electricity generation and transmission) all come to mind.

     

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  16.  
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    tracker1 (profile), Dec 29th, 2009 @ 10:39am

    Re:

    @John, wow, an insightful post with a counter-argument. I think Anti-Mike should pay attention. I know this sounds sarcastic, but I'm actually serious here.

     

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  17.  
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    ChimpBush McHitlerBurton, Dec 29th, 2009 @ 10:40am

    Re: Europe

    Just to be clear, not only is Europe not one country, it's not even a continent, really.

    So shut up and get a continent, and abolish your stupid laws, (where you have them).

    There.

    CBMHB

     

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  18.  
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    Stuart, Dec 29th, 2009 @ 10:44am

    Re: Mike misses it again

    No one said that dumping should be legal. As far as I know Amazon was not even accused of dumping. The problem is that there is a law that fixes the price. Amazon is being accused of offering a lower price. That is all.

    But you know that.

     

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  19.  
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    Anonymous Coward, Dec 29th, 2009 @ 10:47am

    Re: "Europe is not just one country"

    "North American people are very used to simply forget all about other countries and cultures."

    Yeah, those stupid Canadians and Mexicans. Very self-centric they are.

    Weird how of all the North Americans (and South Americans), The USA is the only Nation to actually use the term "America" in their country's name.

    Mayyyyyybe that's why they "name themselves as 'american' when they actually mean 'united states (of america) citizen'"

    Get a clue and a little grammar and you're set!

     

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  20.  
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    Mike Masnick (profile), Dec 29th, 2009 @ 10:51am

    Re:

    There is an intellectual argument to be made for fixed price laws. Some European countries have decided that having a variety of retailers, especially smaller local companies, is more important than pure economic efficiency. For sake of argument, let's assume that the result is that fewer books are purchased and there is less innovation. Is that always a Bad Thing? At some level of "less", it clearly is. But the real world question is how much is really being lost, and whether the gains are a worthwhile trade off. I'm glad I live in the US, where fierce price competition is the norm, but I can also see the advantages of alternate systems.

    Yes, if there were actual evidence that these sorts of laws increased the number of "smaller local companies" you might have a point. But there's little evidence to suggest that's the case. In the UK, they dumped these price-fix rules for books, and it actually increased the number independent bookseller and small local publishers as well in the aftermath. Now there were likely other factors as well (and correlation is not causation, of course), but there's at least some solid evidence that getting rid of these laws does not lead to fewer local businesses.

     

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  21.  
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    Anonymous Coward, Dec 29th, 2009 @ 10:53am

    Re: "Europe is not just one country"

    I'm so sick of people saying America is not really America. Saying American citizen is just as correct as saying United States citizen. Why? Because they are both shortenings of the full name: United States of America. And while its true that there are other countries in the continents of North America and South America, there aren't any other countries with "America" in the name. So, United States of America, United States, USA, and America are all correct. Get over it.

     

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  22.  
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    Luci, Dec 29th, 2009 @ 10:55am

    Re: "Europe is not just one country"

    No offense taken or meant, but we are the United States of AMERICA, so Americans is still accurate, and 'United States Citizen' is still accurate, as well. Neither is /complete/.

     

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  23.  
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    Anonymous Coward, Dec 29th, 2009 @ 11:22am

    Re: Re: "Europe is not just one country"

    'United States Citizen' is not correct, unless you are talking about both the citizens of the United States of America and the United States of Mexico. (and probably some other countries composed of states that are united...)

     

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  24.  
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    Anonymous Coward, Dec 29th, 2009 @ 11:55am

    Just change your country's name. Not that big of a deal.

     

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  25.  
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    The Anti-Mike, Dec 29th, 2009 @ 12:40pm

    Re: Mike misses it again

    Sorry, my troll side got out of hand again. Forget what I said above, it's complete trash. I really need to figure out a way to control that guy...

     

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  26.  
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    Colg, Dec 29th, 2009 @ 12:49pm

    Re: "Europe is not just one country"

    Please don´t be mad. European people are very used to simply forget all about other countries and cultures.
    They even name themselves as "European" when they actually mean "Snob". Europe is not just one country also you know...
    No offense intended here, just wanted to criticize a bit of European culture now that I´ve got some time at my hands ;)

    In all seriousness:

    Most Americans (United states citizens if you must) live up to their ears in other cultures be they domestic or foreign.
    Europe is pretty vanilla by comparison. Our "culture" is european + everyone else. A European that thinks "North American People" lack cultural awareness is a bit obtuse.

     

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  27.  
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    The Groove Tiger (profile), Dec 29th, 2009 @ 12:51pm

    Re: Re: "Europe is not just one country"

    I shall name my country "Federated States of Earthling"!

     

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  28.  
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    harbingerofdoom (profile), Dec 29th, 2009 @ 1:19pm

    Re: Mike misses it again

    and just so the viewers at home are included:

    mike says "free markets should be allowed to set prices"
    anti-mike says "rich companies would unfairly take over the market"

    mike says "companies should figure out a way to sell stuff rather than sue everyone into being forced to use an out dated method"
    anti-mike says "you are taking money away from people!

    moral of the story = anti-mike is just going to say whatever he can in order to take a contrary position to mike.
    an excellent summation can be found here.

     

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  29.  
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    The Anti-Mike, Dec 29th, 2009 @ 1:48pm

    Re: Re: Mike misses it again

    mike says "free markets should be allowed to set prices"
    anti-mike says "rich companies would unfairly take over the market"


    I say that large companies should not be able to come into markets and sell below cost price, leveraging their profits in other markets. If they do this, they are likely to become dominant in the market, potentially the only company in the market, and thus creating a monopoly (and you know what happens when there is a monopoly). The free market should set the price, but whatever short term gain is made by below cost products is lost when the market is dominated and prices rise due to lack of competition.

    mike says "companies should figure out a way to sell stuff rather than sue everyone into being forced to use an out dated method"
    anti-mike says "you are taking money away from people!


    I didn't say anything like that. Companies are not normally able to sell well below cost price for any length of time. It is unnatural. Amazon has enough cash to be able to continue to do it long enough to put others out of business, creating an unnatural marketplace.

    It is artificial, and results in much higher prices. Nobody will want to re-enter the market later, because they know that Amazon can always just cut the prices below cost again to push them out of business.

    moral of the story = anti-mike is just going to say whatever he can in order to take a contrary position to mike.

    The moral of the story is that absolute free markets are things that exist only in Econ classes. Reality doesn't work that way.

     

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  30.  
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    Dave A (profile), Dec 29th, 2009 @ 2:31pm

    Re: "Europe is not just one country"

    This is ironic on several levels. You've managed to create *layers* of irony, and it's gorgeous.

    If you are criticizing United States culture, "North American people" includes Canada too which is a different country. Americans name themselves Americans because it's the last word in the name of their country. It's not arrogance, it's simply easier than "United States of America-ian.

    The real irony here is that your generalization, which is true to an extent, implies a complete cultural homogeneity which is hilariously wrooong, and affected by somewhat of a double standard with statements like yours. The ignorance goes in multiple directions. It's probably hollywood's fault for exporting such shit.

     

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  31.  
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    The Anti-Mike, Dec 29th, 2009 @ 2:59pm

    Re: Re: Mike misses it again

    Coming into a regulated marketplace and offering incentives that are effectively price busting is against the rules of that country. Offering free shipping, example, is effectively lowering the price of the book. It would be like a physical book store offering $10 back to "pay your gas". The effects would be the same, books $10 cheaper.

    If you dislike regulated marketplaces, that is something that could be debated. But coming into a regulated marketplace and playing games to get around the restrictions isn't exactly playing fairly, now is it?

     

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  32.  
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    The Anti-Mike, Dec 29th, 2009 @ 2:59pm

    Re: Re: Mike misses it again

    Nothing like someone borrowing your name. Kids.

     

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  33.  
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    DocMenach (profile), Dec 29th, 2009 @ 3:23pm

    Re: Re: Re: Anti-Mike misses it again

    Except that part of "price-busting" would be selling the books at a price that is below cost. Nowhere have you shown that Amazon is selling below cost. They may be selling it a a price that is below the normal retail price, but I am quite confident that amazon is making a profit on the book sale.

     

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  34.  
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    The Anti-Mike, Dec 29th, 2009 @ 4:17pm

    Re: Re: Re: Mike misses it again

    Shut up, troll! Back into your cave. Apologies, folks, and ignore my earlier comments. SP syndrome strikes again.

     

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  35.  
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    Chargone (profile), Dec 29th, 2009 @ 5:48pm

    Re: Re: Mike misses it again

    Why not?

    The video game companies already do. globally.

    As in, if memory served, Paradox ended up having to charge more than they needed to on Gamers Gate (technically different companies, i believe, but very closely tied and i think owned by the same person/people?) because if they didn't the physical shops in many places wouldn't take their games.

    Not that that's due to Law, but still.

    ....

    Please note that the above is slightly sarcastic. The fact is that i consider the whole thing is very silly.

     

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  36.  
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    jonathon, Dec 29th, 2009 @ 5:52pm

    Re: Re: Mike misses it again

    Actually, Amazon, Costco, and Sam's Club, amongst other retail giants, have been able to sell books at a price that is less than the usual book retailed can buy them at, from either the wholesaler, or the publisher, and not lose money on the deal. [Well, to the extent that their cost of the books was less than their selling price, they didn't lose money.]

    jonathon

     

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  37.  
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    She who lives in Vienna, Dec 30th, 2009 @ 12:41am

    From what I know about our book-pricing-laws they have to do with cross-financing. Bestsellers are sold at a higher price to finance books that sell only a few copies and can therefore be sold at a more affordable price.

     

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