Competition review supports tackling Australia Tax

The Ian Harper-led review of Australian competition policy has advocated removing geoblocks and restrictions on parallel importation in its draft report.

Australia should have a fair use exception for copyright, and Australians should be able to use technology to bypass geoblocks to buy goods overseas, according to the draft report from the Competition Policy Review.

The Ian Harper-led review into Australia's competition regulatory environment has backed a number of the recommendations out of the IT Pricing review in its draft report (PDF) handed down today.

The IT Pricing review, which has not been responded to by the government over one-year since its report was handed down, had several recommendations backed by the Harper panel, including banning the so-called geoblocks as a last resort and amending the Copyright Act to allow Australians to circumvent technological protection measures that control geographic market segmentation.

The content industry estimates that around 200,000 Australians using virtual private networks (VPNs) to access Netflix, and have recently begun pressuring the US streaming video giant to cut off Australians from accessing the service, because Netflix doesn't own the rights to stream shows and films in Australia.

The recommendation of the Harper review would address and remove the ambiguity over whether the practice of using VPNs to access Netflix is against Australian law, which some local industry executives have referred to as "illegal Netflix downloads".

Although the report advocated for Australians to bypass geoblocks, the Harper review noted it would be difficult for the government to legislate against international pricing discrimination for what Australians pay for IT and content locally, versus in other markets.

"Attempting to legislate against international price discrimination could result in significant implementation and enforcement difficulties and risks negative unintended consequences. Instead, the panel supports moves to address international price discrimination through market solutions that empower consumers," the panel said.

"These include the removal of restrictions on parallel imports and ensuring that consumers are able to take legal steps to circumvent attempts to prevent their accessing cheaper legitimate goods."

There should be another review into intellectual property law in Australia by the Productivity Commission, according to the draft report, with a focus on the impact of IP rights on competition.

The panel also recommended that all remaining restrictions on parallel importing be removed unless it can be shown they are in the public interest.

"Relaxing parallel import restrictions is expected to deliver net benefits to the community, provided appropriate regulatory and compliance frameworks and consumer education programs are in place," the draft report stated.

The report also recommended that oversight over telecommunications access, such as oversight of Telstra's fixed line network and wholesale access provided to its competitors such as iiNet, should be transferred from the Australian Competition and Consumer Commission to a new regulator with a single oversight for national access and pricing.

The panel did, however, note that some of the competition policies would likely be dealt with under the final regulatory review component of the Vertigan review due out "very soon".

Submissions on the draft report are being accepted until Monday November 17, 2014, and a final report will be submitted to government in March 2015.

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