Overseas Web Site Access & Pricing Being Watched By ACCC

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EXCLUSIVE: The Chairman of the Australian Competition and Consumer Commission, Graeme Samuel, has said that there “could be a need” for a change in Federal Law to allow consumers to buy books and movies online from overseas websites without pricing restrictions being placed on them by global vendors.Currently consumers in Australia are being locked out of movie, book and technology websites because vendors don’t want goods sold in Australia at prices cheaper than what Australian high street retailers are currently selling the same goods for.

Currently Amazon is offering several e books for US$9.95. The same hardcopy book is selling in Australia for $32.95 and $35.95.

In an exclusive interview with SmartHouse and ChannelNews, Samuels, who is a technology expert, has said that he is well aware of the issues that are emerging online, with “the pricing and the access to content and goods”.

“The ACCC is currently watching this issue and I am well aware of some of the issues that are emerging. I own a Kindle that I purchased from Amazon and like a lot of people I have been stopped from downloading certain books because of regional restrictions,” he said.

“Whether we have the laws to tackle some of these issues is a question that has to be asked. We are currently restricted by what we can do. Under Part 4 of the Trades Practises Act, we have the powers to take action over commercial pricing issues. The grey area is laws relating to parallel importing; recently proposed changes to these laws proposed by the Federal Minister Craig Emerson were rejected by the Government so there are restrictions on how far we can go,” said Samuel.

“We need to open up competition, not restrict it, but to do this we need to have the powers to implement change. I am well aware of the way that IP addresses from Australia are being blocked when you go to buy something online I have experienced it first hand when I have gone to buy content.”

 

Vendors are also able to identify the use of an Australian credit card, with many vendors restricting use of the card on an overseas website. The same applies when an Australian IP address is identified. 

Currently book publishers operating in Australia are supporting hard copy sales over the new e-book format being offered by Amazon, who last month launched its new Kindle reader in Australia.

While many talked off the record, none would talk on the record about pricing and access restrictions.

The publishers, who are concerned over the cheap pricing of e-books offered by Amazon, are set to attract the attention of Australian Competition and Consumer Commission, according to Samuel.

This month Simon & Schuster and the Hachette Book Group, who both operate in Australia, have said that they are delaying the launch of titles such as Don DeLillo’s Point Omega and the Karl Rove memoir Courage and Consequence for e-books because of concerns that the pricing for e-book editions over hardback copies will impact retailers and pricing.

Simon & Schuster CEO Carolyn Reidy told The Wall Street Journal that the “right place for the e-book is after the hardcover but before the paperback”, acknowledging that some readers will be “disappointed” by that timeline.

As companies like Sony and Amazon expand their e-book offerings, book publishers have moved to take control of pricing by delaying the launch of several books to the e-book platform. They are also restricting the sale of certain e-books into Australia because hard copy versions of the same book are not yet on sale in Australia.

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At a product level companies like Sony and Apple are stopping consumers from accessing goods on overseas sites. Sony, who has its own retail store network in the USA as well as its own online stores, is currently stopping Australians from buying goods from its US store.

Instead the company is forcing consumers in Australia to pay double and in some cases three times the amount that a US consumer is allowed to buy the same product for. Apple is charging up to 25 per cent over US pricing with some goods.

The same is happening in the movie market, where Hollywood movie studios are restricting content with several movies restricted initially to cinemas and DVD rental. It is only of late that some studios have made content available for download from an online site. However, the cost is up to triple in Australia than what an American consumer pays for the same movie.     

Privately ,book publishers have said that they do not want a situation to develop where e-books eat into sales of hardcover releases, nor do they want sales taken away from their retail networks in Australia.

 

 

 

The WSJ said that while the publishers don’t necessarily lose money themselves when a retailer discounts individual e-books, they fear that the current $9.99 standard for digital titles will create a “sticky” price in people’s minds that will upend the publishing industry’s business model.

Currently Amazon is pushing hard for simultaneous release of books in hardcover and for its Kindle reader, with a company spokesman issuing this warning via the Journal: “Authors get the most publicity at launch and need to strike while the iron is hot. If readers can’t get their preferred format at that moment, they may buy a different book or just not buy a book at all.”

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