MazMatters: Committee Reports on its IT Pricing Reference

The House of Representatives Standing Committee on Infrastructure and Communications has reported on its reference into IT Pricing. Its report was released on Tuesday (30 July 2013) and amongst other matters, confirmed that in product areas like the hardware and software Australians on average paid 50 to 100 percent more than consumers in the USA and recommended changes to copyright and consumer law to ensure this situation changes in future.

The Committee's Reference
The Committee was required to inquire:

Whether a difference in prices exist between IT hardware and software products, including computer games and consoles, e-books and music and videos sold in Australia over the internet or in retail outlets as compared to markets in the US, UK and economies in the Asia-Pacific;

Establish what these differences are;

Determine why these differences exist;

Establish what the impacts of these differences might be on Australian businesses, governments and households; and

Determine what actions might be taken to help address any differences that operate to the disadvantage of Australian consumers.

The Committee's Findings
After a 12 month investigation the Committee found in the evidence presented to it that the inquiry was . . . "left [in] little doubt about the extent and depth of concern about IT pricing in Australia. Consumers are clearly perplexed, frustrated and angered by the experience of paying higher prices for IT products than consumers in comparable countries."

From the evidence received the Committee concluded that in many cases, the price differences for IT products could not be explained by the cost of doing business in Australia. This it found was particularly so when it came to digitally delivered content and the Committee concluded "that many IT products were more expensive in Australia because of regional pricing strategies implemented by major vendors and copyright holders"

In its report the Committe returned 10 recommendations, of particular interest are recommendations four to nine which deal with proposed changes to consumer and copyright law especially the control if not removal of techniques like "geoblocking" designed to lock content and/or software products to a geographical area of use.

Recommendations
The recommendations are as follows:

With respect to price discrimination and its impact on consumer

1. That the ABS develop a comprehensive program to monitor and report expenditure on IT products, hardware and software, both domestically and overseas, as well as the size and volume of the online retail market.

2. Considering the importance of IT products to education, and in the interests of greater transparency in this area, the Committee recommends that the Australian Government, in consultation with Universities Australia and CAUDIT, conduct a comprehensive study of the future IT needs of and costs faced by Australian Universities, in order to provide clearer financial parameters for negotiations.

3. That the Australian Government consider a whole-of-government accessible IT procurement policy, to be developed by relevant agencies including AGIMO, and in consultation with relevant stakeholder groups including ACCAN.

With respect Copyright, circumvention, competition, and remedies

4. That the parallel importation restrictions still found in the Copyright Act 1968 (Cth) be lifted, and that the parallel importation defence in the Trade Marks Act 1995 (Cth) be reviewed and broadened to ensure it is effective in allowing the importation of genuine goods.

5. That the Australian Government amend the Copyright Act’s section 10(1) anti-circumvention provisions to clarify and secure consumers’ rights to circumvent technological protection measures that control geographic market segmentation.

6. That the Australian Government investigate options to educate Australian consumers and businesses as to:

the extent to which they may circumvent geoblocking mechanisms in order to access cheaper legitimate goods;

the tools and techniques which they may use to do so; and

the way in which their rights under the Australian Consumer Law (ACL) may be affected should they choose to do so.

7. That the Australian Government, in conjunction with relevant agencies, consider the creation of a ‘right of resale’ in relation to digitally distributed content, and clarification of ‘fair use’ rights for consumers, businesses, and educational institutions, including restrictions on vendors’ ability to ‘lock’ digital content into a particular ecosystem.

8. The repeal of section 51(3) of the Competition and Consumer Act 2010.

9. That the Australian Government consider enacting a ban on geoblocking as an option of last resort, should persistent market failure exist in spite of the changes to the Competition and Consumer Act and the Copyright Act recommended in this report.

10. That the Australian Government investigate the feasibility of amending the Competition and Consumer Act so that contracts or terms of service which seek to enforce geoblocking are considered void.

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