French Politician Wants To Limit How Cheaply Companies Can Sell Goods Online Compared to Physical Shop Prices
from the good-luck-with-that dept
A couple of weeks ago, Techdirt wrote about a store that was trying to charge customers $5 for “just looking“, because it felt that many people were merely inspecting goods there before then buying them online. Guillaume Champeau points us to a French politician who is also worried about the same problem, and has proposed modifying the law governing commerce to deal with it (original in French). Here’s the politician’s explanation in the preamble of why it is needed:
Currently, regardless of the margin necessary for commercial activity the prices charged by distributors in town centers are often much higher than the prices charged by suppliers on their online sites.
This leads local shops to become mere showcases for products, products that consumers prefer afterwards to buy online at lower prices.
Equally, this decay of urban centers affects other sectors, such as hotels and catering.
Also, the proposal submitted to you aims to prevent suppliers from selling online at a price lower than the price at which they sell to distributors. The prices of products sold online may thus remain lower [than in physical shops], but in a reasonable and acceptable way.
The key problem with this idea is that it won’t work. Even if the law were passed, people would just buy from online stores outside France, where prices will still be lower, because they would be unaffected by the new French legislation. Nor can that be stopped, because one of the impulses behind the European Union is to encourage precisely this kind of competition among companies located in different countries in order to bring about lower prices across Europe for the consumer’s benefit.
The real solution, as Mike noted in the previous case, is for physical stores to become more attractive, not for governments to pass yet more clueless and ineffectual laws trying to diminish the power of the Internet.