Apple, Microsoft Summonsed To Explain Australian Price Disparity

In the midst of the IT pricing inquiry major offenders Apple, Microsoft and Adobe have been reluctant to speak to the Committee handling the inquiry to explain themselves. As a result of this all three companies have now been summonsed to speak at a public hearing on March 22 in Canberra to answer questions regarding the increased pricing of its technology in Australia.

In short: this means that if all three companies do not send representatives to the hearing there will be direct legal consequences.

Ed Husic, IT pricing's Harvey Dent, welcomed the move but claimed its one they government shouldn't have been forced to make.

"These firms should have cooperated and been prepared to be more open and transparent about their pricing approaches," he said.

"In what’s probably the first time anywhere in the world, these IT firms are now being summonsed by the Australian Parliament to explain why they price their products so much higher in Australia compared to the US.

"Adobe, Apple and Microsoft are just a few firms that have continually defied the public’s call for answers and refused to appear before the IT Pricing Inquiry.

"While television and computer prices fell 14 per cent according the to the latest Consumer Price Index Figures, there’s still a long way to go – with some estimates suggesting that Australian prices are up to 60 per cent higher than the US.

"Given the widespread use of IT across businesses and the community, the prices paid for hardware and software can have a major commercial and economic impact.

"Getting downward movement on IT prices and easing the bite of price discrimination should be an important micro-economic priority – so I’m looking forward to hearing from these firms about their pricing approaches."

It'll be interesting to hear specifically how all three companies defend their practices — particularly with regards to the pricing of digital products. Considering the amount of publishers that artificially raise prices on services like Steam for Australian consumers, hopefully these summons represent a very real attempt by the Australian government to take IT companies to task on unfair pricing policies.


Comments

    I don't care if it's correct, "Summonsed" seems like a stupid word.

      I disagree, actually on the contrary my good Sir. I wish it was used more often.

        Ditto. It sounds like such a bad ass word.

      I can't read that without Gollum asking "what is a Summonsed, precious?" must be monday...

      Agreed. I kept reading it as "summoned" or "summonised".

      Like hanged (the execution use). Always hated it.

      for readability, title should be changed to Australian Parliament issues a summons to Apple and Microsoft to explain why they are money-grubbing bastard-holes

        Not just MS and apple, its every electronic product ever that is priced far higher than the US or UK even.

      That was my first thought on reading that title. Why is "summoned" insufficient? Bloody legalese...

      I dunno, "summoned" makes me think the Committee have expert-level Conjuration skill.

    Step by step, inch by inch ..

      I thought it was Full House - "Step by Step, Day by Day." Derpaderp.

        Add another Derp in there Hyper, Step by Step is from the show Step by Step. ;)

          http://youtu.be/Ya2xifdO_l0 :P

          Last edited 13/02/13 10:48 am

    Harvey Dent? Serious??

      No that's the joker.

        http://25.media.tumblr.com/tumblr_m5qf8nssHo1qbaj4uo1_500.gif

    They charge Australians more because so many Australian dopes pay the higher prices. Enquiry over.

      We should haggle?

        Well I buy from overseas where the prices are lower.

          That's not the point, the point is you shouldn't have to buy from overseas, you should be able to get the same fair deal locally.

          I personally contributed to the inquiry, specifically its about digital pricing disparities, and from the really small number of entries from consumers and Australians (compared to the massive influx of entries to the R18+ rating inquiry) you are right in the sense that we are a lucky country and people here are generally well off enough to pay the higher prices.

          Again though, that doesn't change the fact those prices are not fair, particularly for digital goods.

            My point is that if EVERYONE was buying overseas then prices here would drop. Unrealistic I know, but the prices are high because people pay the high prices. These businesses are getting the sales already so why would they lower their prices?

              I see your point, that could work, but you're right it's unrealistic though.

              Anyway, personally as an Australian tax payer I prefer the government do the hard work for me to keep companies in check so I don't have to scrounge the web for digital deals.

                Remember what it felt like to find a bargain?

                  He doesn't, he prefers the government do it for him. Instead of being happy with how prices have fallen dramatically (up to $50 for some games) and further since the viability of the internet.

                  If the government was serious, they would only need to look as far as there own laws and regulations to why EVERYTHING in Australia costs more. Not just games.

              But that's pretty much what's happening. You think consumer letters are the reason this shit is finally being investigated in a somewhat serious capacity. People like Harvey are being noticeably hurt by consumers buying online, so now you have both consumers and retailers wanting an explanation and a change. Whether or not it's enough of a problem yet that anything will be forced to change who knows.

            The reason the Pricing entries were no where near in number compared to the R18+ rating decision was because EB carried the forms for the R18+ thing but they're not going to encourage people to sign something that is going to lose them money and business compared to the R18+ thing that will likely make them more money.

              Sure, the inquiry I'm talking about was in regards to digital only IT pricing, so not really anything to do with retail (moreso iTunes, in game micro transactions, online software as a service etc, downloadable games via steam/origin etc).

              I'm not actually now sure if that's what this article is referencing or not (here's the link on the parliamentary Inquiry website: http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=ic/itpricing/index.htm).

              In any case I think you are right that EB carried the R18+ torch and people feel more strongly about that issue in general. And as mentioned earlier @bangers is right that most Aussies just pay higher and deal with it, its kind of in that spot where the digital IT pricing disparity is not high enough to warrant the effort of most Australians to write an entry for the inquiry (I did though, coz I'm wierd like that).

      wrong I've been on the buying side of 2 different electrical retailers, you could haggle all you like they were still making a small margin on ticket prices

    now all they need to do is get valve to tell the publishers to fix the prices for aussie games

      They're already fixing prices. That's the problem!

      I really doubt Valve have any complaint against a publisher placing a game on Steam at a higher price, im sure there is a percentage of that sale they get so they in turn would be making more money.

      Publishers are just a good way to pass on the buck without offending their customer.

      Well the publishers "blame" the retails stores who can't compete with the prices.

        which really funny when the publishers sell their product to the stores at an extremely high price

      A friend of mine posted to Facebook a few days ago a screen capture of Halo 4 for sale on Xbox Live for $99.99 for a digital download. It's absolutely absurd. Publishers may try to use every excuse in the book but there really is no justification for it.

        And we lost instruction Manuals for games in the process! Remember the "lowers cost of distribution/saves the planet and thus lower RRP for the consumer." When were they going to implement these savings? 2322?

          Well I suppose the game's RRP is probably $109.99 so they might fool themselves into thinking they are doing the right thing there.

        When games on demand first launched here, Mass Effect 1 was priced at $100 several YEARS after its release, incidently this was 10 bucks more than it cost me in kmart when the game first launched

    Are they allowed to use the excuse that they think we are a captive market? lol

    I'm guessing this probably has more to do with stuff like Microsoft Office/Windows, Adobe Photoshop and whatever software Apple produces, stuff that should be on par with US software prices particularly when digitally distributed.

    But it's a step in the right direction.

    Bring Nintendo into that mix as well damnit!

      I love Nintendo games but their prices have always felt like sand in my crack. $79 for Skyward Sword (on special) 14 months after it came out. Sell the game for half the price and it would sell more than twice as many copies as it does now.

        $99 at EB :/

    I'm paying 50% to 70% more for MSDN renewal's and here I thought Microsoft does this because they can and we can't do anything to stop them!

    Hope by next year's renewal I see prices that are close to US.

      Join a TAFE class.
      Get head teacher to set up a MSDN account
      Drop out of TAFE course...
      Free MSDN membership for a year

    Online prices for games on services like Steam are higher than the US because if they weren't, they would butcher their own Retail sales.

      I bet the PC retail market in Australia is huge.

        Sadly not. Most EB Game stores have a corner or sometimes a quarter-wall sectioned to PC games, and it's almost always in the same ratio.
        1/4 = Pre-order/new release games/boxes, usually 1-2 shelves.
        1/4 = Shrine to Blizzard, with individual rows dedicated to Diablo III and Mists of Pandaria.
        1/4 = Shrine to Hidden Object/Casual games like Angry Birds, Sherlock Holmes, Nancy Drew, etc...
        1/4 = Assorted PC games, most of them face down in stacks on the bottom row near the floor (As the overflow pre-owned console games are.)

        No competition on price, either.
        I bought METRO 2033 on GMG for $2.50 last year only to see it the next day on the shelves for $39.95.

        So nah, better of importing your PC titles from the UK if you're an Australian. :(

      I'm sorry but that's BS. How many retailers GENUINELY care about PC games? Look in your local EB for instance and compare the size of their PC section to the Xbox or PS3 section. The fact is, Steam is not in competition with retailers because it's PC only, and most retailers just don't give a crap about the PC market.

      And let's not forget that it's the publishers who are setting the retail prices, not EB or JB etc. If publishers didn't want to butcher their sales at retail by having fair pricing online, they'd stop charging Aussie retailers so much more than the US or UK.

      You can't tell me it costs $30-40 to distribute each individual box.

        That $30 or so is quickly eaten up by distribution, GST, and retailer markups.

    This issue is nothing compared to the outrageously inflated prices we pay for European motor vehicles.

    People here pay approx 2-3 times more than the United States! We pay $60,000 plus for an entry level luxury import, while that same money buys you the high-end sports model overseas???

    And then people wonder why their luxury imported car depreciates like a sinking rock. Where is the government on this issue???

      You can blame the luxury car tax, and the fact that Australia is logistically a long way from European assembly lines.

        ^ this

        The difference in car prices is basically self enforced just ask anyone who attempted to make money by importing a $30,000 car from Europe that sells for $100,000 over here to resell. Sounds like a great way to make money until you factor in all the legislation that's been passed to prevent that (Which I believe originally was intended to keep the Australian car manufacturing industry alive, I maybe wrong on that...if it was god knows why it's still around now :P). So yes a rather different issue from the electronics price problem, one we can blame the companies the other we can blame ourselves (or the government or whatever wording takes your fancy :))

    The "Australia Tax" extends past just IT products.

    Most Aussie "dopes" pay the higher price because of the penalties imposed on importing goods from overseas. I'm a smoker (unfortunately) and I pay many orders of magnitude more than a similar pack sold to someone in the States. But am I allowed to import bulk smokes? No. Because the penalties for doing so are fairly severe. So I pay my 23-odd bucks for my packet of 40's and am done with it.

    Cars, motorbikes, many things are up-priced for our market. For example (a ridiculous one), a Porsche 911 Turbo will set you back (I believe) around $500,000. The same car in the US? More than 80% off at about $80,000. What the hell is wrong with Australia? Or the rest of the world? I know for a fact that a RHD conversion doesn't cost anywhere near $420,000. I feel like I'm being screwed every day, more and more. Oh well, I'll never own a Porsche anyway.

    The least they can do is fix our game prices.

      Cigarettes are not a good comparison, because so much extra tax is put on them. Cars also have some extra tax I think. Tax on anything else is just GST, 10%.

      A good chunk of that is the governments handiwork. There's the ~30% extra you pay on cars over a certain price. It's called the luxury car tax. The logic being that if you can afford a nice car, then you can afford to pay the government for the privilege of affording said nice car.

        Umm, 30% of $80,000 is $24,000 meaning you still need to account for about $400,000 or 500% of the US cost...

      I'm more worried about stuff like air fares.

      PER>LON>PER is twice as expensive as LON>PER>LON.

      Still don't get your argument against digital download prices??.. Can you download a smoke online from overseas?? nothing should have an import tax or any sought of mark up if it was sold as a digital bought item.. I say go for the jugular on the itunes store Australian government..

    Edit: Made comment that had already been made :/

    Last edited 11/02/13 12:42 pm

    I'm all for bringing pricing into line with the rest of the word, but everyone has to remember that if you want to be paid $60,000 a year here as compared to $30,000 overseas, then the consumer will have to pay for your wage, hence the larger price tag. When companies start to charge exonentially more compared to the States, then thats a different story. We will never have the same pricing as the states.

      we all know that the reason we encorage this is because we pay 3* as much as overseas is some cases

      The only problem being that these are overseas companies and the money goes to the U.S not to Australians. So really we're paying a price for an australian product (wage) whilst they sell it at cost price (American/Chinese wage) + profit

    Adobe! Adobe! Adobeeeeeeeeeeeeeee!! Summons Adobe too!

    And the game developers wonder why piracy is proliferating.

      You know you can buy games at international prices right?

      There's tons of online stores out there providing options to get around the Australia tax. I never buy any games that are marked up for the Australian market at our local price(I could accept 10% for GST but that's it for digital), however I've still bought dozens of titles that fall into that category thanks to those kind of stores. The internet is your friend ^_^

    Digital pricing is the big one.

    I expect they'll come up with a loophole/reason/excuse for the in store prices.

    "Bu bu bu, it costs lots fo money to export to Australia, and you guys tax more, and and and, you guysm ake us jump through hoops and red tape. We have to buy those hoops and tape off you, our stores don't sell it".

    But I guess even digital, they'll claim retailers would complain about lower digital prices.

      Ya know, cost of distribution, finders fee... digital is expensive you know ;)

    Hopefully the music section of iTunes gets some focus. The Apple App Store is actually reasonably priced (the Aussie Tax is minimal. Pages iOS there is $9.99, here is $10.49. I am 100% cool with that), yet a $10 Album on iTunes will cost $17-18 here, which is pretty silly on their part, when you consider that there are other sources in the music market (including very easy piracy compared to Apps).

    Always felt Apple thought it was too cool for school. This proves it! They must be the biggest offenders of all time selling products that are generally overrated, overpriced and underpowered.

    I don't think the only pricing problem here is for games and technology. Everyday items and groceries are substantially more than the other countries, I have been doing some research and at my local Foodworks a 2 litre of Coke costs $3.70 where as the same bottle over there costs 69 cents. That's just f*cked.

      Though, at least we have strict rules regarding food production.

        This article made me have a new apreication for the food products we sell over here:
        http://www.guardian.co.uk/business/2013/feb/09/aldi-100-percent-horsemeat-beef-products

    Australia's a nice place. We have good welfare, relatively clean cities and a low degree of social and political dissent. However, if you really want to "live the good life" you'd better start earning a degree or two. And fast.

    I didn't - nor do I - want to become a business major. Or an IT specialist. Or a tradesmen. I want to write for a living. As such, I'm on my own achieving that goal... Which is just fine, except that while I make my millions I have to work a job that, though far from horrible, makes peanuts compared to the current, low-to-middle class norms.

    The so called "Australian Tax", ridiculously high rent, cigarettes, food and entertainment are a cruel joke. Apparently none of us are truly allowed to prosper until our monthly disposable income is in the thousands.

    Good gun laws, though ;)

      You do realize the cigarettes are a personal lifestyle choice.. You smokers and drinkers are all the same, I reckon there should be a massive tax on the stuff so the tax dollars go to the higher premium in public hospitalization costs down the road.. If you wanna save a few bucks a week cut the smoking or if your a heavy drinker cut back. And you'll see the savings..

        Yeah, I know. I picked it up again when my wife did. She suffers from anxiety, very, very badly, so it was an act of desperation to help her cope.

        But, we got fantastic news today (I'm gonna be a daddy!), and I'm back on the book that helped me quit last time. We can do it!!!

        I understand your self righteousness, truly, but please don't judge us too harshly. And what about the rest of the post!? I thought I made a couple of decent points, despite my soon to be (once again) former bad habit ;)

    As a few others have said I think there's a very simple reason prices are so high here - mainstream Australians are lazy, stupid or both. The mainstream still have the mentality that purchasing online, especially from Asia, will result in them getting "ripped off" or "scammed" somehow (despite stores like Playasia/Ozgameshop being some of the most reliable places on the web with some of the best prices). They do not realise how simple and easy it is to protect yourself and make online orders.

    This is something the 18 - 29 demographic has no issues with, but the mums and dads of the 12-16 demographic are still either technologically illiterate or paranoid/ignorant about online safety/shopping. Thus they continue to purchase from places such as EB, paying full retail price at $109.95 ALSO unaware of price matching or putting the effort in to shop around. In short, most of the problem is a case of a certain demographic doing what's easiest rather than what's smartest, even if it means being taken for a ride by publishers/retailers.

    If the market can sustain it, companies will obviously continue their greedy practices, taking advantage of the populous. There's really no excuse on their part other than greed, we're past the point of being sucked in by the usual excuses. i.e import/export costs/geographical isolation etc with the generation of digital downloads in full swing. The film & music industry is also guilty of this, charging up to $35 for new releases whether on Bluray or DVD.

    The only solution is for consumers to wise up, since companies will never ever have the best interests of consumers in mind. This enquiry may help but people in general NEED to wise up and stop dishing out so much money when there are far cheap alternatives available.

      Greed isn't the problem if people are willing on both sides. After all, isn't trying to get a cheaper deal just as 'greedy'?

      The only worry I have from importing games from playasia and OZgameshop is the chance that the version I get doesn't have english language during gameplay, An asian language box doesn't bother me (I think the written japanese language looks cool).

    I cant see any issue with Microsofts pricing in Australia...I brought WIN 7 ultimate and it only cost me $250 were my mate brought a crapple iphone 5 for a stupid amount of money but still could not use the phone unless he spent more money on a iTunes card then more hassles when he tried to transfer his music out of iTunes to play in media player...he now owns a Samsung galaxy coz his crapple is feeding the worms in a million bits....so in saying that APPLE should be the ones lookd at IMO

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