Aust flags IT pricing, geo-blocking in TPP negotiations

Aust flags IT pricing, geo-blocking in TPP negotiations

Summary: The Australian Department of Foreign Affairs and Trade has flagged concerns over the geo-blocking of overseas content and the Australia tax for IT pricing in Trans-Pacific Partnership negotiations.

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The Australian Department of Foreign Affairs and Trade (DFAT) has told negotiators in the wide-ranging Trans-Pacific Partnership (TPP) trade negotiations that it wants to possibly include remedies to bring Australian IT pricing in line with prices that are paid overseas.

The TPP is an agreement between Australia, the United States, Vietnam, Malaysia, Brunei Darussalam, Chile, New Zealand, and Singapore, aimed at making trade between the various nations easier. According to DFAT in a recent Budget Estimates hearing, the TPP agreement is going to be nearly 1,000 pages long when it is completed, and will include a significant chapter relating to intellectual property rights between the signatory nations. A draft of this chapter was leaked in February last year (PDF). After the treaty is completed, individual countries will have to sign and ratify it.

According to recent reports, US President Barack Obama is committed to seeing the agreement completed by the end of 2013, and the next round of closed-door negotiations.

Speaking at a hearing of the parliamentary inquiry into IT pricing disparity in Australia, DFAT's first assistant secretary in trade negotiations, Hamish McCormick, told the committee that Australian negotiators have brought up the issue of Australians paying more for IT products as a point of discussion.

"We've said basically ... this is an issue of some domestic interest here, is there something we could do in the TPP?

"We'd like to have a discussion about the possibilities. Is there something we could do to facilitate better outcomes for consumers?" McCormick said.

At this point, though, negotiations have not progressed further than flagging that Australia wants to have the discussion.

"We haven't got beyond that, really. It is a recent development," he said. "I think people are willing to have that discussion."

The department has paid close attention to a number of issues raised by the inquiry, McCormick said, including the problem with the use of geo-blocking technology to prevent Australians from buying products or accessing content hosted by companies that are based overseas in the US or the UK.

McCormick said that DFAT has checked numerous trade agreements that Australia has entered into, and that there is nothing preventing Australia from cracking down on geo-blocking.

"Australia has rights and obligations under free-trade agreements, under World Trade Organisation agreements ... including the right to prevent the abuse of intellectual property rights," he said.

McCormick said that geo-blocking could be seen as anti-competitive behaviour.

"These rights may be applicable where geo-blocking is being used to implement differential pricing in an anti-competitive way," he said.

He said that while his department would be ready to assist the committee in remedying this issue, it would be difficult to enforce changes on overseas companies.

"A threshold issue is to identify options for Australia to exercise jurisdiction to a website hosted outside of Australia in another country," he said. "Unless you can deal with that issue, it would seem to be an important requirement if you wanted to develop practical measures if you wanted to deal with anti-competitive geo-blocking."

The Australian Competition and Consumer Commission (ACCC) has previously argued that consumers who are able to circumvent geo-blocking and similar restrictions would ultimately force the industry to change its behaviour.

"If it becomes a big enough way in which consumers can circumvent limitations being imposed by the companies on their consumers, then those methods can start to have an impact on sales, and we're aware it's already having an impact on the market," ACCC executive general manager for enforcement and compliance Marcus Bezzi said.

"We are seeing signs — to some extent, at least — the market is dealing with some of these issues."

Topics: Government, Government AU, Australia

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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6 comments
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  • too confusing

    This article is too confusing with too many threads. I still do not get core problem here.

    Are you saying that Australian consumers pay more for IT services which are available at more economical rates to others? If that's the case then how geo-blocking will help?

    If Australian government does not get paid (i.e. through tax) on foreign content and services then it is different matter and may be looked separately through enforcement; in that case I do not see how Australian consumers will be better off! Any tax adds into cost of product or service, it does not make it cheaper.
    p.vinnie@...
    • In a nutshell

      Many companies outside Australia use both geolocation and geoblocking to stop Australians accessing their service/products at the same price as their locals do.

      The TV/music/movie companies do it so they can do distribution deals (same as the old DVD region blocking).

      Software companies do it to charge us extra (iTunes, for example, charge AUD$229.99 for the ACDC Complete Set (digital download) in Australia, while in the US it's USD$149.99. Our exchange rate is currently around $1 AUD = $1.04USD, so we should by rights pay slightly less than the US listed price). Adobe software can be hundereds or thousands more here than in the US. These are just a handful of examples amongst many, many more.

      Hope that clears things up for you a bit?
      Tinman_au
    • because geo-blocking is used to stifle competition.

      Lets use the new Kindle Paperwhite as an example. On Amazon Americans can get it for $130 (no ads) while in Australia the exact same model sells for $230-$250.

      lets put this in perspective:
      -$20 for no ads $150
      -Goods and Sevices Tax is 10% $165
      - $20 shipping from US (its made in China) $185
      -$185/1.04 = $178

      why the hell should we have to pay an extra $50-$70 ($70-$90 if you ship it straight from China). That's a 40% extra mark-up on what it costs them compared with the US, and this is seen all across the IT Hardware/Software market in Australia because someone has paid a bride (Kindle is a bad example because its Amazons product) for these things not to be shipped to Australia(Geo-Blocking).
      nicholaas321
  • Just when I thought it was safe to go out after the Internet filter..

    The worrying thread in this is the persistent inability of BIG "this and that" as well as government to grasp the fact that the world IS changing and that old business models are dying horrible slow strangled deaths when they could be could be flying and for the betterment of all (We hope). Im sure there are downsides to all aspects but it is a real concern that there are forces in government that are still trying to use force which such ideas as geoblocking to maintain the status quo.
    clarky
    • Actually...

      The article actually says the Australian government want to stop overseas companies form geoblocking, not the other way around ;o)

      This is actually the first good thing I've heard about when it comes to the TPP...it's a shame they wont actually talk to us about the bad stuff (for consumers) that's in it...
      Tinman_au
  • only two winners here

    The US content mafiaas and the buzz cut singaporeans who do their bidding in this geoblock. They have already stitched up (along with the South Africans/Poms in the minerals and metals and banks) the price of petrol gas and electricity. Now we are going to be an IT gravel pit for the local sort of ivy league skull and bones types...

    and out pollies and bureaucrats are not smart enough (or have too many handles on them) to prevent it...
    walkerjian@...