Aust flags IT pricing, geo-blocking in TPP negotiations

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.
Written by Josh Taylor, Contributor

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."

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