Harper review: break up ACCC, free up IP*, let freedom reign

Australia's federal government has conducted a review into competition policy and there's plenty in it to ponder for the country's tech sector.

Following last September's release of its preliminary study, the Harper Review has now issued its final report.

Aside from the recommendation that the rules governing ride-sharing be reviewed immediately – an interesting route for the federal government to take, since the taxi industry is regulated at the state level – the review highlighted various aspects of the country's intellectual property regime for reform.

The greatest impact on the telecommunications sector would be the proposed split-up of functions governed by the Australian Competition and Consumer Commission (ACCC).

Under the current regime, the ACCC is in charge of access pricing, access regulation, and competition policy for the telecommunications industry.

The Harper Review instead says pricing and infrastructure access should be split from the ACCC and handed to a new regulator, while the ACCC retains its competition and consumer functions.

Unsurprisingly, ACCC chairman Rod Sims isn't so keen on the idea, issuing a statement which while broadly welcoming the reports, notes:

“Apart from the increased overheads from having to run two organisations rather than one, there would be very real costs for businesses in having to deal with two regulators, who may have conflicting views.”

“Breaking up the ACCC would also go against the international trend, which is towards agency consolidation”.

The report singles out laws governing parallel imports, but seems to leave content industries off the deregulation list, confining its recommendations for reform to books and second-hand cars.

As tech buyers well know, companies that think they can discourage punters from buying products offshore often respond with higher prices.

“The threat of parallel imports may also induce international suppliers to re-think their regional arrangements”, the report notes (but not for movies or TV broadcasts, it seems).

Vertical market restrictions should be eased

In its resale price maintenance discussion, the review does say that the Competition and Consumer Act should ensure that “consumers are able to take lawful steps to circumvent attempts to prevent their access to cheaper legitimate goods”.

Vertical restrictions in the current act should be simplified, the report states: third-line forcing (“we'll only sell you the razor if you'll also buy our blades”) should be ignored except where it reduces competition.

Resale price maintenance (“if you discount our product we'll stop supplying you”) should still be prohibited, but the Apple workaround where the manufacturer operates the retail outlet should be permitted.

The report states: “Currently, there is no exemption for RPM [resale price maintenance] between a manufacturer and a retailer that is a subsidiary of the manufacturer”, something the report says should be created.

This would, The Register supposes, be defended on the basis that Australian companies would be on the same footing as multinationals like Apple, Sony and Samsung who operate vertically integrated retail outlets.

IP and treaties

The report makes a suggestion that's bound to be ignored by the Department of Foreign Affairs and Trade: the intellectual property (IP) provisions of international trade treaties like the Trans Pacific Partnership should only be ratified after they're made public.

“Trade negotiations should be informed by an independent and transparent analysis of the costs and benefits to Australia of any proposed intellectual property provisions. Such an analysis should be undertaken and published before negotiations are concluded”, it says.

Given the impact of technology on IP policy, Harper also suggests the Productivity Commission devote a year to a separate review covering: “competition policy issues in intellectual property arising from new developments in technology and markets; and the principles underpinning the inclusion of intellectual property provisions in international trade agreements”. ®

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