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The issue of parallel imports will not go away – but there are other options to explore. Mustafa Sayed

Read it and weep: the book trade needs more than parallel import restrictions

The Australian book trade has a long history of tension between books produced at home and books imported from overseas. But our contemporary age may be the first in which parallel importation is undertaken not by booksellers in competition with each other, but by individual consumers in competition with local booksellers.

Known in the trade as PIRs, parallel importation restrictions are a feature of Australia’s Copyright Act and can be summed up as two rules:

1) For a title where no Australian published version exists, any overseas editions may be imported.

2) Once an Australian edition is available for purchase, booksellers are barred from importing overseas copies, unless the title becomes unavailable in Australia for more than three months.

The simple ability to import overseas books into Australia by downloading purchased titles via Amazon’s “fast, free” global cellular network or ordering online via Book Depository has had many effects.

It has not just removed the need to visit physical bookstores; it has also undermined the economic benefits and protection that formerly accrued to Australian publishers, printers and booksellers through the general legal prohibition on the parallel importation of books into Australia by members of the local book trade.

Closing the market

Parallel importation occurs when a product protected by intellectual property rights is imported into Australia after an authorised locally-published version has already been made available for sale in Australia.

As a form of border protection for companies operating in the Australian market, the Australian edition of a book can mean a version of a title which has been solely manufactured in Australia by the owner of the copyright in the work. It can also be an edition by someone who is permitted to manufacture it in Australia under an exclusive licensed arrangement.

It can mean overseas published editions of the work which are allowed into Australia with regards to a contractual arrangement about who is authorised to import, sell and distribute copies locally. Importantly, it can also be about who is not allowed to sell copies.

Restrictions on parallel importation provides protection for the publication of books in Australia by local firms and protection for overseas publishers who wish to maintain a “closed market” in Australia for their editions of titles only.

This prevents local Australian booksellers from sourcing cheaper editions of these same titles from alternative overseas sources. It stops booksellers from obtaining stronger local sales by passing the savings to the reader or from obtaining stronger profits by not passing on the savings.

Shane Lin

For booksellers, “closing the market” is seen to restrain competition at the wholesale level by limiting the choice of suppliers for physical books to authorised channels only.

For the consumer, the lack of access to cheaper imports in the local market places little pressure on local retailers to reconsider book prices.

Each major technological advance in copying and distributing text has historically been viewed as a potential threat to the economic equilibrium existing between publishers, printers, distributors and booksellers.

But in the current climate the new technology has also allowed readers to develop new purchasing behaviours with respect to digital and overseas sources of books.

In 2009, the government considered removing copyright restrictions on the parallel importation of books under the view that their continuance increased local book prices. While Australia’s literary communities were responding to the Productivity Commission’s 2009 inquiry into this, readers could already parallel import cheaper books into Australia by way of their internet browser or Kindle.

Australian parallel importation laws certainly protected the local book trade from potentially anti-competitive practices by other bricks-and-mortar businesses. Critically, it did not protect them from the practices of several hundred thousand individual readers.

The combined volume of eBook purchases in Australia in the year following the Productivity Commission’s Inquiry was around 3.4 million sales valued at A$35 million.

At the close of the inquiry in 2009, the government stepped back from altering the nation’s regulatory framework. The protections seemed less and less important to individual consumer’s book buying behaviour. It released a statement that acknowledged the key issues while also distancing itself from the Australian book trade as a future source of support.

A recurring debate

The issue of parallel imports will not go away. It has been a regular point of debate since the first Australian book trade inquiries at the start of the 20th century. Then, as now, the issue was that the price advantage accorded to imported texts worked against the sale of Australian manufactured books, which seemed unreasonably expensive in comparison.

The added pressure today is that the book trade is now competing with its customers.

In 2013, Amazon’s vice president of Kindle Content, David Nagger, acknowledged that the company’s early success in the US digital book market could be credited to a business model that set it apart from all previous e-reader experiments. Unlike other devices which could only display content that had to be manually loaded onto them using a computer, with the Kindle you were always “holding a bookstore in your hand”.

The Kindle bookstore was always available through the company’s own “whispernet” data network, regardless of whether you had access to another internet connection.

Where competitors had failed to gain mainstream consumer interest with various devices, such as the Apple Newton (1993) through to the Sony PRS-505 (2007), Amazon recognised that:

the e-book market would rise or fall with consumers’ ability to get the books they wanted, at an attractive price, and with all the convenience they had come to expect from their increasingly powerful mobile devices.

For David Nagger, Amazon wanted to sell books during those stretches of personal time at home or on the train that were unreachable by the physical book trade. Being able to at any time tap into Amazon’s digital bookstore, which launched with more than 88,000 titles including 100 of the 112 New York Times bestsellers for November 2007, was considered by many commentators of the time to be the Kindle’s single most revolutionary component. You could “think of a book, and have it in less than 60 seconds”.

Strengthen exports

Conveniences like this have transformed the book trade. It will be important therefore not to rehearse past arguments in the current debate. From embargoes to tariffs, in order to create a book culture that is both native and international it would be useful to set aside these kinds of protectionist ideas.

We might instead consider strengthening an export market for Australian books. As British publisher Walter Harrup put it in 1945, in the Sydney Morning Herald:

what Australia needs more than the sale of Australian books in Australia is the sale of Australian books in other parts of the world. What is the good of a country having something to say to the world and yet being unable to communicate those ideas to the world?

It was a comment that implied the many ways in which the business of home and imported books were interconnected. Members of the Australian book trade in the early 20th century certainly seemed prepared to discuss how to restructure book imports and exports to greater local commercial advantage.

The question remains whether that is still the case today.

Would you like to write on the PIR debate? Contact the Arts + Culture editor.

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