Competition review joins chorus against 'Australia tax'

The Coalition-appointed panel charged with reviewing Australia’s competition policies has resoundingly backed the advice of a parliamentary inquiry into IT pricing, recommending that copyright rules be tweaked to encourage consumers to work around the so called ‘Australia Tax’.

The review panel, headed by economics Professor Ian Harper, has supported the prospect of more Australians using technologies like virtual private networks connecting to proxy servers and international mail forwarding services to circumvent international price discrimination.

The panel has also backed lifting a ban on parallel imports, unless cases can be proven to be in the public interest.

Back in July 2013 a parliamentary committee investigating international IT price discrepancies between Australia and the rest of the world found that Australians were being routinely charged up to 50 percent more for hardware and software, without any concrete justification from the vendors.

Amongst its 52 draft recommendations, handed down today, the Harper Review said it “endorses in principle” the market-based mechanisms the committee put forward “as a means of encouraging a market-based, consumer driven solution to concerns about international price discrimination.”

Like the House of Representatives committee, the Harper Review panel has stopped short of endorsing an all-out ban on price discrimination, which it said would be hard to enforce and liable to have unintended impacts on competition.

However it has supported amendments to the Copyright Act designed to secure consumer’s legal right to circumvent geoblocking and location-based pricing, as well as a campaign to educate consumers and Australian businesses about the online tools they can use to do it.

The review panel noted advice from the ACCC, which thinks that if circumvention becomes sufficiently widespread, the market is likely to adjust organically in response,  just like TV networks have been forced to expand the online broadcast of some shows in response to online piracy.

One of the most vocal members of the IT price inquiry committee, Labor MP Ed Husic, today welcomed the Harper Review’s support but added that he was getting impatient about real action on the issue.

“How many people in positions such as Ian Harper’s need to tell the Government it is time to take action on this?” he asked, suggesting that the Government might be secretly hamstrung by Trans-Pacific Partnership negotiations.

However he added that he would have liked to have seen the parliamentary committee and the Harper Review take a tougher stance on geoblocking.

“The Harper review shows it is time to take the hammer to geoblocking,” he told iTnews. Rather than being a last resort option, Husic said he would like to see geoblocking banned altogether, and companies required to show just cause if they want to maintain the practice.

The Harper Review recommended that geoblocking restrictions, alongside proposed ‘rights of resale’ should form the basis for a future review of IP laws.

“I do think we face the prospect of review overload. It’s time we act,” he said.

Industry lobby the Australian Information Industry Association, which has defended IT price discrimination in the past, said it would gauge member’s view before responding to the Harper recommendations.

The review panel will take feedback on the draft report until 17 November 2014, before finalising its advice to Government by March 2015.