Government inquiry calls for fairer Australian game pricing

A government inquiry into the pricing of IT products in Australia--including video games and consoles--has recommended banning geo-blocking, lifting restrictions on parallel imports, and setting up public information campaigns to make Australians more aware of how they can circumvent country restrictions on pricing and access.

The inquiry into IT pricing made 10 recommendations, ranging from better tracking of IT prices in Australia and overseas to the removal of current parallel import restrictions. With video games, the inquiry noted that a submission from consumer group Choice found significant differences in pricing of retail games in Australia compared to the US.

"The submission compared the prices of 20 recent and new-release games sold on EB Games’ Australian website against the same company’s US website. Only one game--The Elder Scrolls V: Skyrim--was at parity with the US, while the majority of games were between 40 percent to 90 percent more expensive on the Australian website," the inquiry report stated.

Many of the inquiry's recommendations, however, focus on the practice of geo-blocking, which is the restriction of electronic products or services based on geographic location. Examples of geo-blocking services cited in the report include Steam, Origin, Xbox Live, and PlayStation Network.

"The practical effect of geo-blocking from the Australian consumer’s perspective is to restrict access to a cheaper global marketplace. According to views expressed in submissions, many Australian consumers see themselves as limited to a national market characterised by markedly higher prices for IT products and services," the report stated.

The inquiry recommended that any contracts or terms of service agreements that enforce geo-blocking restrictions be considered void under Australian law, and has even called for a total ban on geo-blocking as a "last resort" should other market mechanisms to restrict their impact on Australians prove to be unsuccessful. The inquiry is also advocating for more consumer support in this area, including clarification on the legality of any practices to circumvent geo-blocking, as well as more education on how Australian consumers can go around current blocks.

The recommendations come after a federal government inquiry in 2012 looked into whether Australians are being asked to pay more for IT goods and services, the reasons behind any such discrepancies, and what could be done to level the pricing playing fields. House Communications Committee chair Nick Champion MP said that the inquiry--which heard directly from Apple, Microsoft, and Adobe executives, as well as receiving more than 130 submissions--found that IT companies and copyright holders are charging Australians, on average, 50 percent more for products.

“While companies should remain free to set their own prices, the committee took the view that there are a number of ways in which Australia can act to increase competition in IT markets, which should reduce prices over time,” Champion said.

The inquiry's recommendations now go to the federal government for consideration. With the Australian parliament now in recess and not likely to reconvene until the Federal election later in 2013, it's unlikely that any of the recommendations will be acted on in the short term.