Discounted E-Books Spark Outcry From French Shops

In France a 1981 law prohibits the sale of books for less than 5% below the cover price, a move to protect independent booksellers from the narrow profit margins that big chains could absorb if they discounted books heavily. But e-books, not covered by the 1981 law because it refers to "printed volumes," typically sell for 25% less than printed works.

Now France is considering how best to stop big Internet retailers, such as Amazon.com Inc. and Apple Inc., from hurting smaller bookstores and publishers with heavily discounted offers on e-books. Sen. Jacques Legendre this month proposed a law that would allow publishers to set the retail price of e-books. In France, a publisher typically offers bookstores a profit margin of between 30% and 40% depending on, say, the size of a bookstore and its sales record. If, for example, a publisher lists a retail price of $10 for a book, it is sold to the bookstore at $6 to $7. But if booksellers have to compete with deep discounts on e-books, the stores' profit margins shrink, a particular problem for small stores. Legendre's aim is to prevent the combination of discounting that undermined compact discs. "Do we want what happened to the music industry to happen to the book business?" he asked.