France faces battle over e-book pricing law

05.05.11  - Barbara Casassus - The Bookseller

France is bracing for battle with the European Commission with its government on the verge of adopting a bill allowing publishers to fix prices for all e-books sold in France.

The bill, which was approved unanimously by an all-party committee from both houses of parliament on Tuesday, said retailers inside or outside France must respect the fixed prices. Final votes in the Senate tonight (5th May) and the National Assembly on 17th May are seen as formalities. So far, Google and Amazon have said they will comply with the law and Apple is expected to do so too.

The cross-border clause has been the main stumbling block to the bill. Initially, the government wanted to restrict the law to domestic operators, leaving publishers to use the agency model for electronic files sold in France by retailers abroad. The situation changed in March, when European competition officials launched dawn raids against five publishers and their trade body (Syndicat National de l’Edition, SNE) on suspicion of forming a cartel to drive up digital book prices through agency pricing.
Another source of friction has been authors’ pay. An earlier draft said authors should share in the cost savings from electronic books, but the final version merely said their pay should be "fair and equitable".

The government has little doubt that the commission will complain about the cross-border element. Nicolas Georges, director of books and reading at the culture ministry, said: "The case will not come to court before enough time has elapsed for the market to develop within the framework we have established. At the moment, e-books represent about 1% of French book sales."

France argues electronic and print books should be treated the same, that fixed e-book prices would protect cultural diversity and that any cross-border obstacles would be minor compared to distortions from tax dumping between European Union (EU) countries.

The government also argues that the law meets the requirement of so-called "imperious reason of general interest", since the EU has recognised the UNESCO convention on cultural diversity. "Midlists could be decimated without a network of bookshops to promote them," George said. Noting that France is ahead of most other European countries on e-book pricing, he hopes it will be able to convince other countries of the value of its new law in the coming months. Germany and Spain both already have similar legislation, and the Netherlands is thinking seriously about following, Georges added.