The Department of BCDE (as reported in the SMH) argues that the price discrimination faced by Australians for software and other ‘electronic goods’ is best left to the market.
For physical goods, some Australian shoppers already ”rent” mailing addresses in the US, and arrange to have the products then sent to Australia. Some consumers may also turn to piracy as a way to get digital content at foreign prices, it said.
I agree that the market will find lots of ways around the price discrimination (and indeed already has). Also, in the longer term, software pricing will probably drop due to innovation and new products. Apps have revolutionised software and price discrimination tends to exist for goods that are ‘platforms’ or ‘unique’ products that are protected by copyright (e.g. specific films). However, there are two points:
- Some of those ‘market solutions’ open consumers to legal liability – piracy is the obvious one. If we want to leave it to the market then market solutions have to be legal. Having some sort of ‘use it or lose it’ relating to software and other electronic goods copyright/IP would help if put together with a ‘free to buy overseas if cheaper overseas’ clause. Some comments on my earlier post suggested this was revolutionary. It isn’t. We already have use it or lose it requirements in other parts of the law (e.g. mining exploration rights under these provisions) and they are the basis of the parallel importing laws for books (albeit that these laws are NOT a model to be copied!).
- The problem is not just in software. Again the market can (and has) developed work arounds for many other products (e.g. re-routing shipments) but in general these are accessed by the well educated and the well off, not by the vast majority of Australians who would really benefit from the ability to ‘buy cheap’ clothing, footwear, etc. So a solution really shouldn’t just focus on software and electronic goods, but look more broadly on lowering barriers to Australian’s accessing cheaper international prices.
So I think a ‘leave it to the market’ approach is naive. We need to discuss reforms to help Australia avoid being on the ‘expensive side’ of international price discrimination. If we can’t improve the system through legal reform, so be it. But there is no point leaving it to the market if the most popular and common solution – piracy – opens up consumers to legal liability.