Last week, the European Commission, which oversees the laws and rules governing the 28-member European Union, was busy working on legislation that may have far-reaching consequences for booksellers on the continent.
First, the commission advanced a measure that would allow countries to set VAT for e-books at the lower levels applied to print books—a measure that is widely viewed as having potential to give a boost to e-book sales. Then, in a moved cheered by booksellers across Europe, the EC forced Amazon to stop including its infamous “most favored nation status” in its contracts, a provision which had forced publishers to reveal the terms of their contracts with other booksellers and distributors and then offer Amazon equal or better terms. Finally, the EU has issued a new rule mandating the elimination of "geo-blocking of copyrighted material," which will end the practice of preventing a customer in one country from buying an e-book from a retailer in another country due to territorial or licensing restrictions. The result is that any bookseller in the EC offering e-books will be required to fulfill orders from any customer in the EC.
This last move is the most recent of several attempts to create a single, European market for content and media. Because of the relative complexity of the book retailing business, it took until 2016 for the EC to make the rule. With the change, it is now mandatory for booksellers to accept orders of print books from anywhere within the EU, so long as the purchaser agrees to pay for shipping.
The latest rule, one creating concern among booksellers, is the one ending geo-blocking. While the EC's aim with this move is to foster competition, the new rule may have the opposite effect. The European and International Booksellers Federation (EIBF) believes the shift may force many booksellers to abandon selling e-books altogether.
The EIBF, which primarily represents small and medium-sized booksellers, issued a press release stating that although 70-85% of booksellers in any given country in the EC sell e-books, the rule change would be to the "sole benefit" of the dominant multi-national e-book platforms, such as Amazon Kindle, Apple iBooks, and Google Play Books.
Selling e-books to customers abroad but within the EC, according to the EIBF, adds layers of complexity to each transaction. For starters, the rate of value added tax (VAT) on e-books differs from their print equivalent country to country. Other things that are different in each country include the rules governing pricing and discounting. There are also currency headaches, as nine countries in the EC don't use the Euro.
Although these issues can be addressed through technology solutions that are widely available, the EIBF feels the technology upgrade is too expensive for small and medium-sized booksellers. The organization has also claimed that booksellers who primarily sell print titles will be hit especially hard, as they don't do a high enough volume of e-book sales to make the investment worthwhile. (E-book sales in Europe are already very low—typically just 1-5% of overall book sales in any given country—and margins are very slim.) With the change, booksellers in the EC who do not comply with the new rules are giving warnings which may lead to penalties, including an order to exit the digital bookselling business altogether.
"Booksellers can’t be forced to sell across borders," said EIBF co-Presidents Fabian Paagman and Jean-Luc Treutenaere in a joint statement. "It is a company choice, in line with the evolution of the market, and booksellers’ first concern is to keep their business afloat.”
