High Court of First Instance of Versailles (3rd Chamber), 11 December 2007, Syndicat de la Librairie Française v. Société Amazon.fr (obs. J.-B. Auroux, in RLDI 2008/33, n° 1118)
The 10th August 1981 Act (‘Loi Lang’) obliges book retailers to fix the sale price of books at a price between 95 and 100% of the price set by the publisher or the importer. This means that a bookstore may not reduce the price of books by more than 5%. The French Association of bookstores took action against Amazon.fr (Amazon in France) for selling books on its website without a delivery charge, and for having offered gift tokens to its clients for opening an account. The Association claimed that Amazon.fr infringed the 1981 Act and that its behaviour constituted unfair competition.
The Association argued that the gift tokens constitute an illegal sale with incentives to purchase as well as a rebate exceeding the maximum 5% reduction authorised by the law, and unfair competition for the independent bookstores that comply with the legislation. The Association also claimed that free delivery constitutes an illegal sale with incentives to purchase, and possibly a sale at a loss, and in any event unfair competition.
Amazon.fr argued that it had stopped offering gift tokens in 2003 in order to appease the situation, and that free delivery does not constitute an incentive, but is a normal way to commercialise its products, the very essence of the attractiveness of its business.
The High Court of First Instance of Versailles considered that the 5 euro gift tokens, offered to welcome new clients buying goods for an amount of at least 10 euros, constitutes a price rebate exceeding the rebate authorised by the law, where the purchase price amounts to less than 100 euros.
With regard to the free delivery, the Court recalls that Article L.121-35 of the Consumer Code provides that ‘All sales or offers for sale of goods or any provision or offer to provide services made to consumers and giving entitlement, free of charge, immediately or at the end of a fixed period, to a bonus consisting of products, goods or services, if these are identical to those forming the subject of the sale or the service provision, are prohibited.’ The Court considered that the free delivery generates a sale at a loss for the books sold at a low price, and constitutes unfair competition for traditional bookstores. The Court therefore ruled that the operation is illegal, and ordered Amazon.fr to cease selling the books without a delivery charge, with a 1.000 euros daily fine for delay in performance. Amazon.fr was also condemned to pay the Association damages.
In an email sent to its clients, Amazon.fr explained that the irony of this condemnation is that the aim of the 1981 Act is to preserve cultural diversity and to give the bookstores the means to offer a wide selection of books, and not only best-sellers. Amazon.fr also notes that France is the only country in the world in which Amazon has been condemned for such practices. It announced that it has lodged an appeal against the judgement and that in the meantime it would continue to deliver books free of charge. It has also put a petition and a newsgroup on the matter online.