Parallel importation of books to Australia (Part 1)

Stack of Old Books by Darren Hester (via Flickr)
Stack of Old Books by Darren Hester (via Flickr)

Last week, the deadline passed for submissions to the Productivity Commission’s study on the copyright restrictions on the parallel importation of books to Australia. I had intended to read the submissions and give a full summary of the pros and cons, but there are way too many for me to get through. I also haven’t decided where I stand on this issue, and tomorrow I’ll talk about why.

The 30/90 rule

The Copyright Act includes an amendment commonly known as the 30/90 rule. When a book is first released anywhere in the world, the Australian publisher who owns local rights must publish an Australian version of the book within 30 days. If the local rights holder makes the book available within 30 days of its first release anywhere, all Australian booksellers must buy the book from the Australian publisher; they can’t import the book from an overseas publisher.

If the publisher fails to publish the book within 30 days, booksellers may import legitimate copies without the permission of the local rights holder—in effect, the publisher loses exclusive rights.

If the book goes out of stock, the Australian publisher has 90 days to supply the book before Australian booksellers can import the book from a foreign distributor.

There’s a small loophole in the law because if a customer places a special order for a book, then the bookseller is allowed to source it from foreign distributors.

It’s the responsibility of booksellers to ensure that they’re sourcing their books from a legitimate source.

The 30/90 rule is supposed to enforce Australia’s territorial copyright and to give the Australian publishing industry some protection against foreign excess stock, without stifling competition. There’s also a cultural argument that the 30/90 rule protects the local publishing industry from being cannibalised by the larger English-speaking territories (US and UK), and that it gives publishers an incentive to produce books tailored specifically to Australian readers.

Pros and cons

There are compelling arguments on both sides, and I’ll try to sum up the most commonly raised issues.

1. Prices will go down in an open market. Many booksellers, and Dymocks in particular (of which Bob Carr is a board member), oppose the current restrictions on parallel importation. They argue that local booksellers can’t properly compete with online booksellers, such as Amazon, who can supply books quicker and more cheaply because they’re not subject to the restrictions. They compare UK, US and Australian book prices to show that books are more expensive here. The downward impact on price is the most dominant argument for an open book market.

Supporters of the status quo point to New Zealand, which opened its book market in 2007. The evidence seems to indicate that opening the market has adversely affected the local publishing industry without any significant impact on the retail price of books. Literary agency Curtis Brown also argues that when you apply freight charges to US and UK books, the Australian retail price can actually be cheaper. The Australian Society of Authors presents actual numbers to demonstrate that the price argument is misleading.

(There’s a side of issue of GST on books. Online retailers, like Amazon, aren’t forced to charge GST on books they sell to Australia, which disadvantages local booksellers. There’s a call to remove GST on books. I think there’s Buckley’s chance of that ever happening.)

It’s interesting to note that not all booksellers agree with Dymocks. QBD, for example, is in favour of keeping the current legislation. I find it telling that the Australian Booksellers Association has actually reversed its previous position and is not supporting an open market.

2. An open market will remove significant administrative overheads. Kinokuniya argues that booksellers are burdened with significant administrative overhead in trying to ensure that books are sourced properly, and that the current system forces booksellers to deal with inefficient publishers.

3. Foreign dumping will squeeze out local publishers and reduce author royalties. The New Zealand Society of Authors provides examples from the NZ experience in which foreign publishers supply excess stock to local booksellers at the expense of local publishers who have made the book available locally, and the withdrawal of local distribution infrastructure by multinational publishers. The sale of excess stock earns no royalties for an author.

4. An open market will effectively remove Australia’s territorial copyright. Garth Nix’s submission presents perhaps the clearest arguments that many authors make against changing the current legislation. Without it, they argue, the contracts that allow authors to grant exclusive licensing rights to publishers become unenforceable. They point out that that the UK and the US have absolute protections against foreign editions competing in their territories, and to allow Australia to become an open market surrenders our territorial copyrights without getting any benefit in return.

Opponents argue that Australia is a natural territory due to its geographical location and population size, and that opening the market won’t remove territorial copyright. Nix rejects this argument and says that it’s impossible police territorial rights violations in an open market because the author has no control over distribution points.

5. Australian authors will find it tougher to succeed. The cumulative effect of 3 and 4 above predicts that the local publishing industry will shrink—to the detriment of Australian authors, particularly those just starting out. Removing all protection for the local industry means that publishers won’t be able or willing to invest in new local authors.

6. Foreign imports will homogenise the market and negatively affect our culture. If booksellers prefer to source books from US distributors, the Australian market will be dominated by books that contain foreign cultural references. According to the Lonely Planets submission:

As can be seen in other areas of our culture – from fashion to music to films to television – Australian culture deserves the government’s protection. To open up a book bought in a local bookshop and read in US spelling with US references (‘dial 911’) is to create a creeping erosion of Australian culture that’s difficult to measure and impossible to reverse.

Or, to put it bluntly, Garth Nix quotes an American editor who says it would be stupid for the government to create an open market for books.

Watch this space…

The Productivity Commission will submit its report to the goverment in May. Tomorrow I’ll post my personal thoughts parallel importation. In the meantime, I’m interested to know which arguments resonate the most for you as a reader.