Apple's struggle to defeat Amazon set to be exposed by European ebook inquiry

[DonaldL.]

Apple's struggle to defeat Amazon set to be exposed by European ebook inquiry

...both in Europe and the United States, are worried that shoppers may be overpaying. This month, both the European commission and the US department of justice have announced investigations into ebook sales. They are to lift the lid on a power struggle between the publishing industry and Amazon that could determine the shape of the book trade for years to come.

[Quexos]

While they're at it, if they might force the publishers to remove the geo-restrictions and allow for payments other than credit cards, such as pre-paid cards that can be purchased at book stores for instance, I might consider buying books. If not, then fine, I know how to get ebooks by myself ...

[JD Gumby]

Originally Posted by Quexos

allow for payments other than credit cards, such as pre-paid cards that can be purchased at book stores for instance

Kobo already does that, at least with Chapters/Indigo gift cards (Canada). And PayPal.

[pdurrant]

Originally Posted by Quexos

While they're at it, if they might force the publishers to remove the geo-restrictions

The only way to remove all geo-restrictions would be to define the point of sale as the seller's location, not the customers. That's not going to happen.

Indeed, in the EU it looks like electronic sales are going to move even more towards being classed as at the customer's location, in terms of the VAT paid.

The likely solution to geo-restrictions is for publishing contracts to include world-wide ebook rights. And that's a slow case-by-case solution that will take a long time to come into effect.

[HarryT]

Originally Posted by Quexos

While they're at it, if they might force the publishers to remove the geo-restrictions and allow for payments other than credit cards, such as pre-paid cards that can be purchased at book stores for instance, I might consider buying books. If not, then fine, I know how to get ebooks by myself ...

Georestrictions are mostly the author's fault, not the publisher. If the publisher only has the legal right to sell the book is a particular region, they would be liable to being sued for breach of contract if they were to sell it elsewhere.

Blame the author for not granting the publisher world-wide rights.

[JoeD]

Originally Posted by pdurrant

The only way to remove all geo-restrictions would be to define the point of sale as the seller's location, not the customers. That's not going to happen.

Indeed, in the EU it looks like electronic sales are going to move even more towards being classed as at the customer's location, in terms of the VAT paid.

The likely solution to geo-restrictions is for publishing contracts to include world-wide ebook rights. And that's a slow case-by-case solution that will take a long time to come into effect.

For VAT point of sale to a non-business customer is where the supplier is. Since ebooks fall under the definition of an electronic service rather than goods.

http://www.hmrc.gov.uk/vat/managing/...s/services.htm

I've not heard anything about that being changed, have you got a link to it?

I think geo-restrictions are more down to authors having contracts that say the books can be sold in region X and Y with one publisher and in Z with another. So when they re-negotiate ebook sales, different publishers can only get rights to certain regions as other publishers already have (whether they use them or not) rights to the rest.

[pdurrant]

Originally Posted by JoeD

I've not heard anything about that being changed, have you got a link to it?

I read it in passing in an article on VAT rate for eBooks. But here seems to be the relevant stuff.

It follows from Directive 2008/8/EC that the rules introduced by the Directive 2002/38/EC will be extended from 1st January 2010 as a permanent measure. From 1st January 2015, this Directive also provides that VAT on telecommunications, radio and television broadcasting and electronic services supplied by a supplier established within the Community to non-taxable persons also established within the Community will be charged in the Member State where the customer belongs (see also the Regulation on administrative co-operation 143/2008 concerning the inclusion of these services in the one stop shop scheme)

[HarryT]

I wonder if this will mean that Amazon will have to start charging UK customers the full UK rate of VAT, rather than the lower Luxembourg rate?

[pdurrant]

Originally Posted by HarryT

I wonder if this will mean that Amazon will have to start charging UK customers the full UK rate of VAT, rather than the lower Luxembourg rate?

Absolutely. From 1st January 2015, Amazon will need to charge customers in each country that country's rate of VAT on eBooks.

Of course, if we're really lucky, by then the UK rate on ebooks might match the UK rate on paper books.

Meanwhile, in the UK we might find that on 1st January 2012, we start geting charged only 3% VAT, if Luxembourg does change it's VAT rate on eBooks, as they have said they will.

[JoeD]

Cheers for the link. Sounds like digital distribution laws are going to get even messier now. I guess it makes sense in that they're trying to treat a digital item sale as a physical one, where you'd have to pay VAT as it passed through customs, but still, that placed the onus on the person buying the item rather than the company selling it, which doesn't quite work with digital.

Wonder how companies stay notified of VAT changes in each different country. The UKs change to 20% might have been reasonably well publicised, but what about changes to different categories of items that may occur from time to time?

Any idea what the clause "non-table persons" actually means? Are they distinguishing between VAT registered or not?

[pdurrant]

Originally Posted by JoeD

Wonder how companies stay notified of VAT changes in each different country. The UKs change to 20% might have been reasonably well publicised, but what about changes to different categories of items that may occur from time to time?

Any idea what the clause "non-table persons" actually means? Are they distinguishing between VAT registered or not?

There are regular VAT notices from the authorities detailing changes in VAT in different countries.

Non-taxable persons are people who are not registered for VAT.

[RainingLemur]

Originally Posted by HarryT

Georestrictions are mostly the author's fault, not the publisher. If the publisher only has the legal right to sell the book is a particular region, they would be liable to being sued for breach of contract if they were to sell it elsewhere.

Blame the author for not granting the publisher world-wide rights.

So... It's ultimately the author that determines where a book is sold? (I'd never looked into it, just kinda took it at face value) Would that mean that someone who self-publishes would be a complete jerk-bag if their book were geo-restricted (since it would be their call, after all)?

[J. Strnad]

Originally Posted by HarryT

Georestrictions are mostly the author's fault, not the publisher. If the publisher only has the legal right to sell the book is a particular region, they would be liable to being sued for breach of contract if they were to sell it elsewhere.

Blame the author for not granting the publisher world-wide rights.

The problem stems from traditional, print publishing, where the publisher might have no foreign distribution. An author would be foolish to grant all foreign rights to a publisher with no distribution outside his native country!

That situation needn't apply to ebooks, but contracts are still catching up with the way things have always been done.

[pdurrant]

Originally Posted by RainingLemur

Would that mean that someone who self-publishes would be a complete jerk-bag if their book were geo-restricted (since it would be their call, after all)?

Yes, unless they also have a previous region-specific contract with a publisher. E.g. Diane Duane sells ebooks of her Young Wizards series herself everywhere except in the US, where her publishers has the ebook rights.

Originally Posted by J. Strnad

An author would be foolish to grant all foreign rights to a publisher with no distribution outside his native country!

That situation needn't apply to ebooks, but contracts are still catching up with the way things have always been done.

Exactly so. If print books don't go away for the mass-market, then the only sensible future contract, IMO, is one with regional, exclusive print-rights, but non-exclusive world-wide ebook rights.

[Quexos]

Not in my country they don't.

Originally Posted by JD Gumby

Kobo already does that, at least with Chapters/Indigo gift cards (Canada). And PayPal.

Their loss, not mine. I won't stop reading and wait till they come to their senses.

Originally Posted by pdurrant

The only way to remove all geo-restrictions would be to define the point of sale as the seller's location, not the customers. That's not going to happen.