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Amazon snubs French free delivery ban with one-cent charge
- j4kp07 12y agoThey could go one step further and offer "rewards" at the end of the calendar year that would make up for the 1 cent.
- rfrey 12y agoSeems like the protection laws were enacted with the goal of ensuring access to books in small towns. Big stores are prevented from discounting books (more than 5%) with the idea that small stores will go out of business from price pressure, then selection will be limited to what the big stores have, which is less than the aggregate of the small stores. Seems reasonable, but does that still apply to Amazon? Even if critics of Amazon are correct, and Amazon raises prices after small businesses are gone, consumers are no worse off than they are now, when discounts are prohibited. I can't see how anybody other than the booksellers are being advantaged here, with the cost being paid by consumers.
- Malarkey73 12y agoEssentially any profit made by Amazon in Europe is faux booked to a Luxembourg office where it is then off-shored to another tax-haven. It then just sits there till Amazon can buy Congress to let them bring it back to US shareholders. That money is effectively removed from the economy. Any profit made in a local bookstore meanwhile will support the jobs of more people and will be taxed and will recirculate when those employees spend that money. Its because they are part of society and pay their way that Amazon can undercut them.
- hk__2 12y agoWhat about money spent by Amazon employees?
- Malarkey73 12y agoThey are exceptionally poorly paid and insecure. Here in the UK most of them are on benefits. Effectively my taxes are subsidising their profits.
- pling 12y agoAs someone in the UK, I'm quite happy for amazon to provide me with low cost items on this basis. The tax is fixed rate VAT here in the UK so everything I buy from a tax dodge means I'm effectively getting a small rebate against my nearly £3375 a month (including income tax, NI and VAT) contribution to the state every month versus spinning another 20% into VAT. Then when I snuff it, capital gains time...
- oh_sigh 12y agoWell, the people who work in the fulfillment centers are poorly paid. The software engineers, managers, and other employees that work within the organization are generally paid very competitively with companies like google etc.
- merrua 12y agoThe technical side in Amazon also report being under staffed and highly stressed comparied with google/apple etc.
- baddox 12y agoYour taxes (as well as mine) are subsidizing the profits of a heck of a lot of firms.
- philwelch 12y agoIf they were unemployed, certainly they would be collecting even more benefits. If anything Amazon is subsidizing your tax burden.
- jessaustin 12y agoThey are exceptionally poorly paid and insecure. So you'll be happy when they're all replaced by robots? This is Amazon, so that's going to happen fairly soon.
- saosebastiao 12y agoAmazon can't evade taxes for money earned in France. If you operate in France, and your business earns revenue in France, you pay French taxes. You can't magically offshore it without paying taxes and then expect to still operate there. What actually happens is that Amazon makes no profit, and thus does not get taxed on profits. But it still pays VAT, Property, B&O, etc.
- mpweiher 12y agoIt's actually quite easy to evade taxes on money earned in a particular country, as you are allowed to subtract inputs from your tax burden. So the French subsidiary buys very expensive inputs from the Luxembourg subsidiary, meaning the French subsidiary doesn't show a profit, mon dieu how could that have happened, such a shame! Fortunately, the Luxembourg subsidiary is very profitable, exclusively from "sales" to the French subsidiary. Obviously all of this typically happens only on paper.
- deleted 12y ago[deleted]
- moe 12y agoThis is worth clarifying because all multi-nationals operate that way. Say Starbucks-France makes 10 billion in profit in a year. Then that year Starbucks-Luxembourg will send it an invoice saying "You owe us 10 billion for a license to use the name Starbucks". That way SB-France, on paper, made no profit and pays no income tax.
- DanBC 12y agoAmazon customers pay VAT. Amazon collects it from the customer.
- rfrey 12y agoThe problem you raise is actually three problems. First is tax-avoidance by Amazon. Second is a massive online seller replacing many employees at the local level with fewer employees at a central location. Third is that the retailer is foreign. The first problem seems better addressed by tax reform, since it impacts many industries other than book selling, and this measure won't stop it with Amazon anyhow. The second problem is one of increased efficiency (to use an economist's definition) causing disruption. The French seem to have been resistant to that since the industrial revolution, so it might be helpful to understand this law in that context. It's hard to see how they're going to win that one in the long run, although prolonged skepticism to the benefits of efficiency might have helped create some of the social benefits in France. From the outside though it looks like this social bias has hurt France more than helped it (other countries have maintained robust social programmes without rejecting technological disruption) so I wouldn't welcome laws promoting it. The third problem is not just a case of nationalism, but because it makes it harder to soften the blow of disruption by pointing to other local jobs in technology. It's comes down to an argument on globalization. The jury is still out on whether globalization will be a net positive or negative. To me it seems unstoppable, though, and I don't think it's wise to be on the wrong side of the trend.
- syntern 12y agoYour remark sounds as if it is the company's fault to act like this. 1) The first part is exactly how the EU was designed: operate from one country, reduce your overhead. Maybe it is not Amazon's fault that they comply with the rules? 2) The second part is exactly how the Congress wanted its tax laws: if you bring money home, pay your taxes, if you don't, we are not involved. Maybe it is not Amazon's fault that they comply with the rules?
- Brakenshire 12y agoThat's fine, they act within the rules, but the rules are not set in stone, and neither does their public image depend solely on not breaking the law. The conversation is not about whether companies should voluntarily act in a certain way, it's whether the laws need to be changed. Or, on occasion, if the law cannot be changed, whether consumers can force change in an organized way, thereby making it profitable for the company to alter its behaviour. Companies are constantly shifting in response to campaigns, or in general to improve their image. It's not a legal requirement to use recycled cups or Fairtrade coffee, but many cafes will do that to look good. Companies shouldn't be surprised if the same sort of reputational damage applies to how they treat their workers or whether they pay a lot less tax than their rivals.
- briandh 12y ago> That money is effectively removed from the economy. Not really. If that money is stored in a bank, most of it will be loaned out. If it is used to buy bonds (including but not limited to government bonds) then it goes to the issuer. And so on.
- Agathos 12y agoBank lending to small businesses is way down since the start of the recession, and if they were inclined to start again they could borrow at nearly zero percent anyway. Bank leadership has been saying they don't see good opportunities. In that climate, Amazon's account makes no difference. See for example http://www.inc.com/jeremy-quittner/wells-fargo-earnings-and-small-business-optimism.html http://www.inc.com/jeremy-quittner/wells-fargo-earnings-and-... http://in.reuters.com/article/2014/07/12/eu-banks-dijsselbloem-idINL6N0PN0EY20140712 http://in.reuters.com/article/2014/07/12/eu-banks-dijsselblo... http://www.forbes.com/sites/cherylsnappconner/2014/07/11/stronger-economy-more-than-federal-policy-will-spur-business-loans-federal-reserve-presidents-say/ http://www.forbes.com/sites/cherylsnappconner/2014/07/11/str...
- adventured 12y agoThis is the only correct answer. Even if Amazon actually removed it from the economy by putting it under Bezos' mattress, that would boost the value of all remaining fiat, increasing purchasing power for everyone else. So consumers would gain a temporary burst of value, which they can utilize today; when the state then devalues fiat over time, Amazon's money will lose value, while the consumer will have locked in that higher purchasing power. There is no scenario under which Amazon actually hurts anybody by 'removing' money from the economy. Money and wealth are not fixed sums anyway.
- ekidd 12y agoSeems like the protection laws were enacted with the goal of ensuring access to books in small towns. I've lived much of my life in small towns in the US, and honestly, the single best thing about Amazon is that it massively increased my access to books. Small-town bookstores never carried more than a handful of programming books, a couple of short shelves of science fiction, and none of the strange specialist material I buy today (books on purely functional data structures, bilingual French/hieroglyphic texts, and so on—everybody wants something out on the long tail, but the details obviously vary). Right now, my least favorite thing about the French book market is the near-impossibility of buying French-language ebooks from overseas, assuming I want more than Le Petit Prince or a bunch of public domain classics. The only French publishing niche that has this figured out is long-form comics (aka bandes dessinées). There, the publishers banded together to create the massively awesome online distributor Izneo, which sucks up more of my book budget than I'd care to admit, and which allows me to buy from anywhere in the world: http://www.izneo.com/ http://www.izneo.com/ On the other hand, the French tradition of aggressive law-making means that they can actually decide to create a 4-year startup visa, then go ahead and actually do it.
- maxerickson 12y agoI think most of those small town stores would have been happy to order you whatever (of course only if they could find it in a catalog). That's still less convenient than internet shopping though.
- makmanalp 12y agoI had a similar experience living in a non-anglophone country ordering english books. Whenever I heard "we can order it" I stopped listening. It always arrived in more than a month, cost tons, got stuck in customs, and wasn't in the catalog anyway.
- merrua 12y agoThat can depend on how religious the owner/runner of the bookshop is and if your own relgious views matter. Science verses Relgion. One Reglion is the locale area, your own is another etc etc
- driverdan 12y ago> Seems reasonable No it doesn't.
- mandalar12 12y agoThe article misses the working part of the law. Book prices in France are not a free market since we have a fixed book price law (https://en.wikipedia.org/wiki/Fixed_book_price_agreement https://en.wikipedia.org/wiki/Fixed_book_price_agreement) meaning that the publisher decides the retail price of the books it publishes. There is an exception authorizing retailers a maximum of 5% discount. In practice all majors players (book store chains, Amazon, supermarkets...) systematically apply the 5% discount. The new law forbids retailers to apply the discount if the book is delivered but allows them to apply the discount on the delivery fees (which is useless to Amazon who offers the delivery). The final effect is that books on Amazon are 5% + 1 cent more expensive than in physical stores.
- moioci 12y agoWould the law permit Amazon to discount the delivery fee more than 100%? ("We'll pay you 5% to allow us to deliver to you.")
- nolok 12y agoNo, in view of the law both (book and delivery) are considered as two different "products" and they are only allowed 5% on the delivery. They can set the delivery price to anything they want, but it was 0 before so it doesn't matter.
- ww520 12y agoCouldn't Amazon provide a frequent use reward card that provides buy 20 with 1 book free to have a similar discount? It has the added benefit of enticing repeated buying.
- gambiting 12y ago"Free collectible 5 Euro note with this purchase!"
- sgdesign 12y agoI'm always amazed at how we have laws for every little thing (or more accurately, against every little thing). Maybe it's the coder in me but it just seems so inefficient, like an if…else if… with dozens of conditions…
- TillE 12y agoI think this is basically why so many nerds become Libertarians. Unfortunately, reality is messy and complicated and not a computer program.
- nova 12y agoSo let's keep making it more complicated, then.
- mpyne 12y agoNah, probably easier to keep pretending that it's super-simple to manage humans at scale just because it's easier to reason about.
- briandh 12y ago> Unfortunately, reality is messy and complicated and not a computer program. > Nah, probably easier to keep pretending that it's super-simple to manage humans at scale just because it's easier to reason about. This canard about libertarians [1] not understanding the complexity of the real world is oft-repeated, but it is misguided, and comes off as condescending to boot.[2] The likes of Hayek and Friedman did not contend that reality is simple; they contended that it was complex -- too complex for economic systems based on expansive government intervention (socialism, mercantilism, etc) to grapple with and produce satisfactory outcomes. They advocated a free market system on the premise that it was the best way to handle this complexity, not on the basis that it doesn't exist. Now, you are free to question whether empirical evidence bears out either point. But it is ignorant to suggest libertarianism is based on eschewing complexity. 1. Here I am referring mostly to libertarians of a consequentialist lean. Libertarians of a mostly deontological lean are orthogonal to this discussion because whether or not they understand the world's complexity is mostly immaterial to their policy prescriptions, as they are concerned mostly with morality, not outcomes. 2. Usually unintentionally, I would hope, though it seems that at least with mpyne it is not.
- transfire 12y agoInstead of making yet more laws to patch the mess of old laws (ad nauseum) how about getting rid of a law, i.e the Land Tax. Then brick and mortars would have a natural improvement in their circumstance competing with online retailers.
- praptak 12y agoFrance furious: foreign firm formerly fined for free freight feigns fee!
- workerdrone 12y agoglorious!
- hvs 12y agoI have trouble reading an article from a news source that use value-laden statements like "snubs French free delivery ban" as if they are committing some sort of mortal sin against the state, but have no qualms about making the only visible part of the article be the headline: http://postimg.org/image/ngztksi8j/ http://postimg.org/image/ngztksi8j/ That crass, advertisement-filled page is certainly a bigger offense against the capitalism-averse French than a $0.01 delivery charge.
- unclebucknasty 12y ago>capitalism-averse Interesting phrase In this context, given that the intent (or at least likely effect) of the law is to protect the market from dominance by a single large player.
- wdr1 12y agoI've never seen such an open & deliberate case of regulatory capture.