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IT pricing: Illegal downloading acting as market force, ACCC says

The ACCC has told a parliamentary hearing it can only carry out investigations “through that prism of competition” and simply charging different prices around the world would not directly breach competition laws.

The Australian Consumer and Competition Commission (ACCC) has told a parliamentary inquiry that consumers' use of illegal download sites to access content is a backlash against suppliers.

The ACCC said illegal downloading methods were well-known to many consumers in Australia and are having an impact on supplier strategies. According to the ACCC, this illegal downloading is putting "competitive tension in the market".

“At the end of the day, some of these responses in the market may well end up being a reasonably powerful backlash by consumers against what might be perceived as unfair conduct by suppliers,” an ACCC spokesperson told the inquiry

For example, television broadcasters now bring forward the broadcast of some television programs to avoid consumers illegally downloading them, which is a “market response” to suppliers limiting access to products.

The consumer watchdog also outlined to the committee when it could investigate price discrimination in the market. It stated it can investigate price discrimination being carried out in Australia, regardless of whether the business is located in Australia or elsewhere in the world.

However, it said it can only carry out investigations “through that prism of competition” and simply charging different prices around the world would not directly breach competition laws.

“So you can have price discrimination which has no anti-competitive effect. It may well not be in the interests of consumers, but it might be something that we can do anything about," an ACCC representative told the inquiry.

“We can seek orders in the court – we can take enforcement action – but we don’t have the power to directly intervene in markets. That’s just not the way we are allowed to operate – and we don’t seek to operate in that direct way either.”

Consumer advocacy group Choice has encouraged consumers to ‘spoof’ their IP address and use a US forwarding addresses to beat high IT prices in Australia. The group has also stated that comments being made at the inquiry by industry don’t “stack up”.

Follow Computerworld Australia on Twitter: @ComputerworldAU

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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