ACCC powers over Foxtel's content monopoly limited

Greens communications spokesperson Scott Ludlam has said the Australian competition watchdog should intervene and break Foxtel's stranglehold over shows like Game of Thrones, but the ACCC has indicated its powers are limited.
Written by Josh Taylor, Contributor

While Greens communications spokesperson Scott Ludlam would like the Australian Competition and Consumer Commission (ACCC) to step in and stop Foxtel locking up shows like Game of Thrones on its pay TV network, the competition watchdog has said it has limited power under competition law.

The Australian government is currently developing proposals to stop Australians being 'the worst offenders' in the world when it comes to online copyright infringement, with a view towards a "graduated response" scheme that would see users sent warnings and eventually penalised with fines, speed throttling or even disconnection after repeated warnings.

But critics of the proposal, such as internet service provider iiNet, and Ludlam, have insisted that the best way to reduce copyright infringement is to make the content being shared over BitTorrent more easily available, in line with international release dates, and at an affordable price.

Australia topped the list of file sharers for the new season of Game of Thrones through BitTorrent after Foxtel signed an exclusive deal with HBO that prevented the release of the latest episodes of the show through iTunes and Google Play until the season had finished airing.

To counter the controversy, Foxtel slashed the price of its Foxtel Play streaming and on-demand service for the time when the show was airing.

Ludlam told ZDNet that the ACCC could play a role in making content like Game of Thrones available to people who aren't just Foxtel subscribers.

"I think the ACCC should actually have a strong role to play. I don't want a Foxtel subscription, quite frankly. I respect other people's willingness to pay money for that. A lot of people are seeing that there is a content distribution bottleneck," he said.

"I think the smartest thing the Australian government could do if it really cared about file sharing would be to open up that monopoly and allow other channels, so Australian users can access that material.

"People will pay for curation. I will; most people will."

But the ACCC's powers in this area appear to be fairly limited by a section of the Competition and Consumer Act that limits the watchdog's powers over intellectual property. In its submission (PDF) to the Harper review on competition policy, the ACCC noted that its powers to stop anti-competitive behaviour in the IP market can be limited.

"There may be no general competition law remedy for conduct that simply reflects an exercise of unilateral market power, such as monopoly pricing or poor service," the ACCC said.

"In this respect, if access to particular IP becomes more restricted in the future due to the pace of technological advancement, there may be a need to consider the effectiveness of existing access mechanisms."

The ACCC said that for some types of IP such as patents, there are powers to compel access to IP, but said that there may need to be legislative change to remove the IP exclusion in the Competition and Consumer Act in the event that the existing powers it has are not enough.

The Australiasian Performing Right Association in its submission (PDF) admitted that IP rights place regulatory impediments to competition in Australia but said they were not "unwarranted, nor do they have an unduly impact on competition" and should not be removed or altered.

APRA said that the Copyright Tribunal is well-placed to ensure that monopoly powers of rights holders are not abused.

Australian Digital Alliance disagreed, however, stating in its submission (PDF) that the Competition and Consumer Act should be changed to empower the ACCC to take action against restrictive trade practices.

The competition regulator also warned that Australia should be cautious in signing up to international treaties that may lock in copyright law.

"The ACCC considers that caution should be exercised when entering international treaties or agreements that may have the effect of significantly limiting the ability of the Australian Government to make substantial and effective reforms to IP regulation," the ACCC said.

The treatment of copyright in Australia is part of a number of treaties Australia is in the process of negotiating or has signed in recent months. A National Interest Analysis of the Korea-Australia Free Trade Agreement (KAFTA) suggested that the Copyright Act would even have to be amended to overturn iiNet's High Court victory against the Australian Federation Against Copyright Theft, and force ISPs to cooperate with rights holders looking to crack down on online copyright infringement.

The ACCC said that the impact of the agreements would have significant consequence on IP and competition in Australia over "many years, or even decades".

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