European Commission investigates lowered eBook VAT rates in Luxembourg and France

PaidContent reports that the European Commission has launched an investigation of France and Luxembourg, both of which have lowered their VAT on eBooks to the same as print books. Without naming names, the European Commission is focusing on Amazon, which has based its European headquarters in Luxembourg (where the eBook VAT is 3%) and sells its eBooks from there, thus giving it a big advantage over eBook resellers in the other European Union countries. According to the article, the European Commission is working at cross purposes with its digital agenda commissioner, who's trying to establish a single Europe-wide digital content market with uniformly low prices.

Part of the issue is that the EU allowed its members to lower their book VAT in 2006, and didn't specify any difference between print and eBooks. (eBooks weren't a significant business in 2006.) The European Commission plans to propose making digital and eBook rates equivalent next year, so the investigation may be little more than saber-rattling to mollify booksellers in other countries.