The Australian Competition and Consumer Commission has stepped into a Federal Court case to challenge the international agreement on regional coding of DVDs.
It has described regional coding as an anti-competitive practice that disadvantages Australian consumers.
The commission this morning announced it was intervening as 'a friend of the court' in an important Federal Court copyright case mounted by Sony Computer Entertainment Australia, "because it feared if Sony was successful consumers stood to lose money on PlayStation2 games purchased overseas at significantly cheaper prices by being denied the right to use them in Australia."
SCEA managing director Michael Ephraim was this morning meeting with Sony lawyers and advisors and is expected to respond to the ACCC later in the day.
However, Sony is expected to vigorously oppose the commission's intervention.
The company is seeking to have new provisions of the Copyright Act 1968 applied to stop the use of modification chips in PlayStation2 console to override the regional coding.
If the commission is successful in its bid, the result is likely to have serious ramifications for several other major companies involved in the DVD games and movie industries.
The case is also likely to have international ramifications and call into question the legality of regional coding of DVDs, which is seen as a crucial part of the armoury in the fight against copyright pirates.
ACCC chairman Professor Alan Fels said the commission has been investigating the regional playback control (RPC) technology in DVD players and movies for some time.
"The practical effect of RPC is that a consumer who purchased a DVD player in Australia may be prevented from playing films obtained overseas."
"The ACCC believes that overseas markets give Australian consumers access to a wider range of competitively priced film titles with special features not otherwise available here."
"This (RPC) means they are forced to pay higher prices for films with fewer features and a lesser range of film titles."
He said RPC was also present in PlayStation consoles but could be overcome by the use of mod chips.
Fels said Sony Computer Entertainment was moving to prevent consumers from reaping the benefits of globalisation and was seeking to have an Australian law interpreted to prevent consumer enjoying games bought off-shore.
"Consumers' interests are best served by ensuring access to the widest possible range of goods at the most competitive prices."
"Sony has overridden this basic consumer right by creating and maintaining artificial barriers to trade that are not warranted by the law," he said.