French e-book law

The French Senate has passed the first reading of a bill that would allow publishers to set a fixed price on e-books, in a bid to try to protect publishers and smaller retailers as the e-book market takes off.

But since the first reading on October 26, several objections have been raised - not least of which are whether the law is even legal.

An extension of a 30-year-old law

The law proposed by centre-right senators Catherine Dumas and Jacques Legendre aims to replicate the 1981 Lang Law, which prohibits the sale of physical books for less than five per cent below a cover price set by the publisher.

This law has proved popular in France, helping to maintain one of Europe's best networks independent bookstores by protecting them from competition from large chains.

Dumas and Legendre's bill was the result of a year of consultations with writers, publishers and retailers, who are concerned that their revenues will be hit by the expanding online market. But for now, industry figures show that e-books make up less than one per cent of France's book market, but that is expected to double in the next year.

"In 2011, we will see the beginning of a really strong market," said Clément Hering, an analyst with Gfk, in an interview with Deutsche Welle.

"Till now, it's been quite a tiny market because of the price of products, which is quite high in France, and the number of platforms that are selling e-books which is quite tiny too, but that is changing."

According to Hering, the e-book market so far has been a way of generating extra revenue for publishers rather than something that erodes profits, but that could change. In the US, digital literature accounts for more than eight per cent of the book market.

Enforcability remains an issue

But as the Internet is international, it is difficult to see how this law will work in practice. There seems little to stop a French consumer buying a book from a website based in another country, unless the government decides to geo-block e-book retailer websites. Otherwise, a French consumer could just as easily buy the same title at a lower price from Belgium or Luxembourg.

Another more serious obstacle is the European Court of Justice - this protectionist measure might turn out to run contrary to the idea of a single European market.

The Court has dealt with similar cases, including ones resulting from the Lang law, by determining whether the rule would be discriminatory against imports.

"If they would be discriminatory then, prima facie, they would be unlawful unless the state imposing the restriction would be able justify it in some way." said Angus Johnston, an EU law specialist at Oxford University.

The protection of national culture can be adduced as a justification, but Johnston says it is difficult to argue that a country's literary heritage is protected by allowing the country itself rather than the importer to set the price of a book.

"On the face of it seems it would be challengeable successfully under EU free trade law," he added.

Slowing innovation

The French parliament will take up the debate again in the next few weeks, when an amended version of the bill will be brought before both houses a final time before it can be signed into law.

Another problem with the proposed law, industry watchers said, is that it may inhibit innovation in this relatively new marketplace. The bill doesn't make a distinction between books that are distributed under Creative Commons and other kinds of open, free intellectual property licenses.

This, on the face of it, seems simple: just set the price at zero and carry on distributing the works for free.

But Sébastien Hache, the director of Sesamath a publishing house that creates online text books, wants to be able to keep his options open.

"If a price is stipulated, we are worried people will be prevented from selling it in developing countries, for example, or elsewhere," he said.

Author: Molly Guinness, Paris
Editor: Cyrus Farivar