The action, brought in January 2004 by the French Booksellers' Union (Syndicat de la librairie fran�aise), accused Amazon of offering illegal discounts on books -- and even of selling some books below cost.
The court gave Amazon 10 days to start charging for the delivery of books, which should at least allow the company to maintain the offer through the end-of-year gift-giving season. After that, it must pay a fine of €1,000 (US$1,470) per day that it continues to offer free delivery. It must also pay €100,000 in compensation to the booksellers' union.
Retail prices, particularly of books, are tightly regulated in France.
Using "loss-leaders," or selling products below cost to attract customers, is illegal. Other restrictions apply to books -- retailers must not offer discounts of more than 5 percent on the publisher's recommended price. Many independent booksellers choose to offer this discount in the form of a loyalty bonus based on previous purchases. Larger booksellers simply slash the sticker price of books.
But the free delivery offered by Amazon exceeded the legal limit in the case of cheaper books, the union charged.
The union said it was pleased with the court's ruling, which would help protect vulnerable small bookshops from predatory pricing practices.
Amazon.com did not immediately respond to a request for comment.
Earlier this year, the union won a similar legal victory against Alapage.com, an online bookseller with operations in France, Spain and the U.K. The appeals court ruled that Alapage must pay a fine of €50,000 for illegal pricing practices including the offer of free delivery.
It's not been a good month for U.S. e-commerce sites doing business in France: last week, the French auction regulator sued eBay France for breaching rules on the conduct of auctions. The regulator said that eBay's failure to comply exposed consumers to the risk of fraud. In its defense, eBay France maintained that it is not an auctioneer and that it has "invented another way of buying and selling" not covered by the rules.