An Australian parliamentary inquiry into the high prices of digital music and software Down Under has recommended that consumers find ways to legally bypass geo-blocking technology to find a better deal. A total ban on geo-blocking hasn’t been ruled out.
The Standing Committee on Infrastructure and Communications has concluded its 12-month investigation into IT price discrimination and published its findings with a weighty, 146 page report. In it, the committee notes that downloadable music was a “prominent theme” of complaints.
The committee found that Australian iTunes customers sometimes paid 67% more for their music than their counterparts did in the United States.
In the U.S. store, songs can be priced at US$0.69, $0.99, or $1.29. In Australia, the equivalent tiers are A$1.19, $1.69 and $2.19, the committee notes. The majority of the price comparisons for individual tracks sold through the iTunes store showed prices of US$1.29 and A$2.19 respectively – a mark-up of 67%.
The investigation quoted a separate submitted study by consumer rights organization “Choice,” which compared the prices of 50 individual songs and 20 “classic” albums in the Australian and U.S. iTunes stores, and found the songs were, on average, 51% more costly Down Under.
“Choice” said it didn’t believe that a price difference of 50% was “justifiable,” and nor did the committee.
The committee’s chair Nick Champion said the price differences for IT products “cannot be explained by the cost of doing business in Australia.” Champion noted it would be impossible for the government to regulate IT prices, but he did make a range of recommendations that are “intended to sharpen competition in Australian IT markets.”
There are calls for the parallel importation restrictions still found in the Copyright Act 1968 (Cth) be lifted, and for consumers to have greater rights to “circumvent technological protection measures that control geographic market segmentation.”
Among its most eye-catching recommendations is the committee’s suggestion that the Australian government consider “enacting a ban on geo-blocking as an option of last resort, should persistent market failure exist in spite of the changes to the Competition and Consumer Act and the Copyright Act recommended in this report.”
Over the course of its investigation, the committee reached out to key industry players – including labels association ARIA, market leading music company Universal and of course, Apple, which had argued that the prices of music sold through is digital store was dependent on the wholesale prices set by the music labels.
The committee was less than enthusiastic about the response from some of the third parties. “The Committee remained intrigued throughout the inquiry with regard to the apparent mismatch between industry statements and actions: industry organisations stated a willingness to assist the Committee but demonstrated a clear reluctance to do so,” the report notes.
