Competition Law

Australian Competition Law and Policy Discussion

Restrictions on parallel importation of books here to stay

Posted by Julie Clarke on 11 November 2009

The Government today rejected the Productivity Commission’s Report on Copyright Restrictions on the Parallel Importation of Books, in which it was recommended that parallel import restrictions be removed.  This conclusion accords with the findings on an earlier ACCC Report.

In his press release, Dr Craig Emerson MP (Competition Minister – amongst other things), claimed the Australian book printing and publishing industry already experienced significant online competition from international sources:

Australian book printing and publishing is under strong competitive pressure from international online booksellers such as Amazon and The Book Depository and the Government has formed the view that that this pressure is likely to intensify.

In addition, the technology of electronic books (e-books) like Kindle Books will continue to improve with further innovations and price reductions expected.

Concern was expressed that local authors, publishers and “culture” would be adversely affected by removal of the restrictions and were not prepared to fund compensation for that loss.  The real fear – from the government’s perspective – seems to have been the fear of some job-cuts in the Australian printing industry – a prospect the publishing companies skillfully manipulated to their advantage.

The Press Release also claimed that while compromise proposals were considered, they were all rejected.  Emerson also claimed that because of intense online competition ‘changing the regulations governing book imports is unlikely to have any material effect on the availability of books in Australia’.

One wonders why the Government commissioned a report, which resulted in 563 submissions and ran for some 7-8 months culminating in a report of 240 pages and a supplemental report, if it was never going to support recommendations which conflicted with it’s own desire to protect local publishers.  In Emerson’s defence, it appears he supported the PC recommendations, but was outvoted in Cabinet.

Publishers are the big winners, and many authors will also be pleased, but not all – see, for example, article by Kass Williams in the Australian on 29 October – ‘Let books follow the CD path‘.  See also Lex Hall’s ‘Book import restrictions on books hit students hard‘.  Compare various articles in the Bendigo Advertiser, claiming Australian authors would not be able to get published without the restrictions, a view that no doubt has little to do with their related fear of massive job lost at the largest local employer – a publishing plant.  The submission by Joshua Gans is useful in providing an independent economic analysis of the impact of the restrictions – concluding that they cannot be justified and ‘raise the price of all books sold in Australia’.  See also Joshua’s blog post following the decision.

Australian authors and publishers should not be protected from international competition any more than local musicians and record producers.  Consumers will continue to pay more to prop up local publishers. Book retailers will suffer as their internet-savvy customers will continue to switch to overseas online services to acquire cheaper books. The Government’s decision today is a great disappointment to those who favour free trade, competitive markets – and cheap books!

See further

  • ABC – Fels scathing over book import decision
    Fels referred to the PIR’s as  ‘.. a Government mandated import monopoly market which is grossly overcharging Australians’.  He continues: ‘If the Government can’t deliver this simply reform because of the uneducated clamour of a few authors who are driven by publisher interests then there’s little hope that the Government will be able to stand up to other pressure groups and bring about useful change for the economy and for our society.’

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