Alan Finkel
June 26, 2013
The Age
Australians are treated as second-rate customers in the virtual shops.
Last week, rather than drive to the video store I decided to rent Life of Pi from Amazon. I found it, clicked to purchase, and received the following message: ”We could not process your order because of geographical restrictions on the product which you were attempting to purchase.”
Did they really mean to insult me by saying that I could not rent this movie because of where I live? Surely not, I thought, perhaps the real reason is that the movie has not been released into video stores yet. Not so, it was released to cinemas in September last year, to US video stores in March this year and to Australian video stores in May this year. Stumped, I hopped into the car, drove to the store and rented the DVD.
A month earlier, I wanted to buy a book from the Apple iTunes store. I found it, went through the purchasing process, but then at the last step was told: ”Item not available. The item you’ve requested is not currently available in the Australian store, but is available in the US store.”
In today’s digital age, where there is no meaningful cost difference or effort to supply electronic movies and books globally, why is it that Australian residents have fewer rights than US residents? Whatever logic might argue for price differences and geographical distribution restrictions for printed books and physical DVDs simply does not apply to their electronic counterparts. Apple and Amazon are powerful companies in a connected world, it is therefore difficult to see why they allow themselves to be subject to the old-fashioned, protectionist policies of their suppliers.
Some would argue that if I cannot download a movie because of geographical restrictions I should find a different site from which to download my chosen selection, however I have no interest in viewing an unlicensed copy. To the contrary, I am happy to pay whatever Apple or Amazon want to charge me to download a book or a movie. But I am infuriated when I am told that as a resident of Australia I will be treated as a second-rate global citizen.
Earlier this year, Australian Home Entertainment Distributors Association chief Simon Bush said, ”If you want to watch films that cost hundreds of millions to make, I don’t think it’s too much to ask consumers to pay $3.99.” Mr Bush is correct. But if Australian consumers are told they cannot rent the movie at all, but 350 million Americans can, it’s not surprising that some of them bend the rules.
It’s not just downloadable movies and books. Physical DVDs have regional restrictions, so in principle you cannot play a DVD that you legally purchased in Europe or North America on your conventional DVD player at home in Australia. Even some smartphone apps, which have obviously never had a physical counterpart, are available in the US but not in Australia.
We are constantly told that the world is shrinking. Unfortunately, when it comes to some movies and some books, that’s not actually true for Australians.
Australia signed a free trade agreement with the US in 2005. A fundamental purpose of such an agreement should be an obligation to treat Australian residents no worse than US residents.
In 2012 Apple generated $6 billion revenue in Australia but used a network of international intermediaries to reduce its Australian tax to a mere $40 million. Amazon for its part is the largest seller of books in Australia but there is no GST paid on the vast majority of its sales.
You would think that in return for such privileged taxation treatment these companies would at least do us the courtesy of offering unrestricted sales in our country. This international market is neither fair nor freely competitive. The Australian government should intervene to fix it.
Alan Finkel is the chancellor of Monash University and president of the Australian Academy of Technological Sciences and Engineering.
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