French Digital Tax: Amazon to raise fees by 3% for its French market partners
Updated 14:51, 16-Sep-2019
Amazon will raise fees for its French marketplace partners by three percent starting October 1st. It's in reaction to the digital tax France has slapped on the company along with other tech giants like Google, Apple and Facebook. For a country where about one in every five items is sold online, the move is raising alarm among small and medium enterprises. CGTN's Stefan de Vries has more from Paris.
Romain Boyer runs a small, independent book store, just north of Paris. He has a wide collection of schoolbooks, literature and books on Japan. Amazon's decision will have direct consequences for his business, because the marketplace is a vital part of his turnover.
ROMAIN BOYER BOOK STORE MANAGER "Let's say 30 percent of the yearly turnover. That means around ten books a day. This is not good news. It's a new tax that we cannot recoup. We are losing 3 percent. You can say, well that's not huge, but actually, for a book store, it's quite a lot."
Amazon claims it has no other option than to charge its clients this new tax. Consumer groups in France aren't buying that.
AUTOINE AUTIER, CONSUMERS' ASSOCIATION DEP. DIRECTOR OF STUDIES "Amazon's argument that 'we don't have enough money, we really have to charge the sellers this' is not really convincing the consumers. It is, after all, a very profitable company."
Amazon's step is not being followed by its competitors, like Rakuten, the third-largest e-commerce platform in France.
FABIEN VERSAVAU, CEO RAKUTEN FRANCE "We made the decision that for Rakuten merchants, clients. We will not pass on the 3 percent tax in 2019, since we are waiting for more clarification from the French government on how to enforce these new taxes. And we don't want our clients to be penalized during the shopping season."
Yet this client-friendly gesture comes at a steep price for Rakuten.
FABIEN VERSAVAU, CEO RAKUTEN FRANCE "For the French market, we reckon it would be around several millions of euros, so additional tax. And we think that it will have a negative impact, since companies like us, we will be forced to limit investments in building new businesses and growing the French economy."
In the meantime, Romain Boyer will keep using Amazon to sell dozens of books each month to his clients. But he doesn't know for how long.
ROMAIN BOYER BOOK STORE MANAGER "There will be an impact, that's for sure. But how much, we don't know yet. We will have to recoup somewhere else. Maybe proposing fewer titles, or not buying a new computer, or organizing fewer signing sessions. We will have to find ways to earn it back, but I don't have a solution yet."
Because Amazon is so dominant in the French market, he doesn't have many options.
ROMAIN BOYER BOOK STORE MANAGER "Today, you can't do business without them. That's for sure. Thirty percent of my business. Without that, I would have to close shop."
Stefan de Vries, CGTN, Paris.