ACCC: Publishers Are 'Free To Determine Their Own Pricing Policies'

In the wake of Apple reducing prices on the App Store according to exchange rates, we encouraged people to contact the ACCC with regards to increased Australian prices on online stores such as PSN and Xbox LIVE. The ACCC has started sending out replies and the message is consistent across the board: there's apparently very little the ACCC can do about it.

The replies have come in the form of stock letters which all state the same thing.

"The role of the ACCC is to ensure compliance with the Competition and Consumer Act 2010 (Cth) (the Act), which is designed to encourage fair trading and discourage anti-competitive conduct through a specific set of competition and consumer protection rules.

"I understand and sympathise with your concerns about the high prices that consumers pay for some products in the retail market compared to international prices. The ACCC is constrained by the legislation it administers and there are no provisions in the Act that prohibit this type of conduct. The ACCC has no power to set or control prices for goods and services at either the retail or wholesale levels. It does not have a direct role in regulating or setting prices except in the case of products or services that are declared under Part VIIA of the Act. The price of video games is not declared under Part VIIA. In these circumstances businesses are free to determine their own pricing policies and provided that they do this independently it is unlikely to raise concerns under the Act.

While the information you have provided is unlikely to raise concerns, I have made a record of your complaint in the ACCC’s national confidential database which is monitored to assist the ACCC in its enforcement activities.

The bolded section above is most likely referring to the fact that the Competition and Consumer Act states that price inquiries can only held on the following - defined as 'goods' in the act.

goods includes: (a) ships, aircraft and other vehicles; and (b) animals, including fish; and (c) minerals, trees and crops, whether on, under or attached to land or not; and (d) water; and (e) gas and electricity.

Obviously, video games are not in that list.

Still, as a consumer, you have the power to vote with your wallet. But at this stage, this appears to be the only avenue we have. We've contacted the ACCC and hope to hear more info soon.

Thanks to everyone who forwarded their replies.


Comments

    The frustrating part here I guess is that when the issue was raised with them in the first place, their response was "not enough people are complaining".

    So we complained and their response is "whoops, sorry, not our responsibility".

    Gah!

      Yeah I hear that.

      I followed it up though (received that exact same letter) and asked how to go about requesting they be added to the list. :)

      I hear you here.

      I wish they had just said "we have no power in the first place."

    "In these circumstances businesses are free to determine their own pricing policies and provided that they do this independently it is unlikely to raise concerns under the Act."

    Considering that we've been consistently told that online prices are raised to match retail prices (with publishers blaming retailers and retailers blaming publishers), I question the independence of the pricing decisions we see.

    This isn't exactly surprising, unfortunately.

    The best thing to do is just keep pushing the publishers, or take our money elsewhere until they get the picture.

    It's a fairly unbalanced situation, but consumers do ultimately have a lot of power to change prices.

    I accessed the US Playstation Store on my PS3 the other day, and I was shocked at the insane markup they have on some games. That being said, It's not nearly as bad as the 3DS is.

    then the Competition and Consumer Act needs updating - clearly inadequate if it is incapable of dealing with digital content.

    The original Act is from 1974 - http://en.wikipedia.org/wiki/Competition_and_Consumer_Act_2010 , and amended in 2010 (assumably based on recommendations from the 2003 Dawson Report).

    So, next step - start writing to the minister/s responsible for the Competition and Consumer Act and demand it be brought into the modern era.

    Steam for one is guilty of misrepresentation at the very least - advertising a product as $X, or as released on X date, only to change these later.

    The fact that complaints are made by Australian consumers about a range of online content providers - Steam, PSN, Xbox, iTunes, indicates that Australian consumers need protection and that there are restrictive trade practices at play.

    People actually thought the ACCC could do anything in regards to the prices of games here in Australia?

      You seem to be implying there's a difference between games and any other goods. If the ACCC "has no power to set or control prices for goods and services at either the retail or wholesale levels" then what do they have the power to do? It seems our consumer watchdog has gotten a bit long in tooth.

        I'm not saying there is any difference at all. But digital goods or not, to think that the ACCC can/will do something over regional pricing just because Apple decided to reduce App store prices to match the exchange rate is silly.

          Apparently it was a letter from the ACCC that inspired Apple to make a 'correction'.

            Do we have actual evidence of that? Your original post on the App store price drop mentioned nothing of the ACCC actually saying they contacted Apple in regards to App store pricing.

              I don't think that's true, as Apple adjusted prices in other countries too. Some of them went up (UK), we were just lucky it went down.

    Interestingly Petrol isn't on that list either - which explains a lot.

    My question then becomes why is it being reported that the ACCC had something to do with Apple's price adjustments?

    I got the same standard reply. Bastard government departments!

    Has anyone actually thought to complain about actual PRICE FIXING ?

    Price fixing is illegal

    Agreements between competing businesses to fix prices are illegal under the Competition and Consumer Act 2010. Price fixing agreements do not have to be in writing: they can be a 'wink and a nod', made over a drink in the local pub, at an association meeting or at a social occasion.

    The important point is not how the agreement was made or even how effective it is, but that competitors are working out their prices collectively and not individually.

    It is illegal for a business to enter into or give effect to such agreements.

    or even this

    ACCC institutes legal action against Bertini pram distributor, IGC Dorel

    The Australian Competition and Consumer Commission has instituted legal proceedings against IGC Dorel Pty Ltd and its CEO, Robert Berchik, for allegedly engaging in resale price maintenance.

    IGC Dorel is an Australian company which manufactures and distributes a range of baby and nursery products. IGC Dorel is alleged to have supplied the 'Bertini' brand range of prams to retailers on condition that retailers must sell or advertise those prams at prices specified by IGC Dorel, effectively not allowing them to discount Bertini prams. It is alleged that Mr Berchik was knowingly concerned in the alleged conduct of IGC Dorel.

    The ACCC is seeking court orders that IGC Dorel publishes a corrective notice on its website and sends letters to Bertini retailers informing them that they are free to set the price at which they advertise or sell IGC Dorel products.

    The ACCC is also seeking:

    * the implementation of a trade practices law compliance and training program
    * declarations that IGC Dorel and Mr Berchik contravened the Trade Practices Act 1974
    * injunctions to restrain IGC Dorel and Mr Berchik from engaging in resale price maintenance conduct in the future
    * pecuniary penalties, and
    * ACCC's costs.

    This matter has been listed for a directions hearing on 17 August 2010.

    Release # NR 146/10
    Issued: 26th July 2010

    ALA Steam price hikes etc.

    It has to be the local branch of the publishers who set the pricing I seriously doubt that head office in UK/US give a rats ass about us when they have a bigger market to worry about. Accc should investigate communications chain that originates from Australian Offices to and from Steam for price fixing/management for the Australian market.

      Regional pricing ≠ Price fixing

        It may because Steam increases it's prices to placate local publishers. I'm not a lawyer, though, hence my use of the word "may".

          Do Steam set the prices though? I thought the prices were determined by the publishers.

            It's publishers that set the price.

            Look at the whole Witcher 2 fiasco. CDP were happy to have the game available on Steam and their own store GoG for $40 US everywhere. But closer to release they were forced by Namco Bandai who were distributing the physical copies in Australia to hike the price in the Australian digital stores to $75, the same as the retail Aus price.

      Wait a minute, then what the hell were we complaining about?! Unfair prices isn't considered price fixing? How the hell are we supposed to know the difference. The ACCC are the ones who are meant to look after us!

        Actually the ACCC's job is not to look after us at all.

        The ACCC's Job is to ensure that companies are competing on fair and equal ground for the most part.

        To ensure that in the long run a monopoly or the like doesn't establish itself and then start charging through the roof for everything

      Except that in the case of the steam price hikes. No one is actually price fixing.

      There is no collaboration between 2 companies to keep prices higher.

      There is simply EB complaining. and the Australian publisher responding.

      If anything the line would say that Steam has been given an unfair advantage in that they are sold licenses at a cheaper price than is available to Australian Retailers(though since they aren't based in australia i dont think the ACCC can do anything about it anyway)

      It's why all the internet companys that used telstra wholesale used to complain when telstra lowered it's prices because it often became a point of the only way they could make a respectable userbase was to be cheaper than Telstra retail.

      And because telstra wholesale was the Cost of a line to them. There was only a narrow band Telstra retail-Telstra Wholesale= Possible pricing range. Where the closer they were to wholesale the less profit they made at the chance of snatching customers.

      If it Were EA and Activision coming together to say right both our games are now $150AUD. there would be a problem.

      but as it stands the way steam price hikes are performed are completely legitimate.

      as they are reasoned as the Australian Consumer Price. Much in the same way a Car has the American Price and the Australian Price

      But no one is price fixing.

      The RRP (I will use the PS3 pricing for example here but the principle applies to all platforms) is exactly what it says a recommended price and is AUD120 (vs USD60) everyone actually sells for less than that and they all tend to be different so no collusion = no price fixing.

      My question to Michael Ephraim would be who set the RRP so high? It could be explained by 60USD x approx 0.60 x 10% State Sales Tax x 10% as Oz is smaller market = being generous?

      In 2004 probably when the actual RRP was set the rate was 0.7 but historically had been lower. Still no reason not to revise the RRP for the new Nintendo & PS3 offerings that are coming?

      Its a shame some people didnt read the whole post in regards to the 2nd example provided about PRICE MAINTENANCE (there was even an OR put between them).
      Where the producer sets a price the retailer has to adhere to.

      Generally it is up to the retailer to set their price based on costs associated with that product not be dictated to by the wholesaler/manufacturer/publisher.

      Price hikes (generally causes more attention to the product) or not, you cannot have a producer dictating a retail price imo more so to protect other markets of effectively the same end product.

      RECOMMEND yes as this aids a retailer to make competitive price point that will see them make at least a modest profit to cover costs. You cannot tell a retailer to not sell at a loss etc and certainly cannot tell retailers dont compete against each other over your product.

      Whether these are moral or legal objections I cannot tell the difference at this stage, however just to say the ACCC set the precedence going after the Local Bertini Manufacturer.

      Why not the Local Publishers as well. Considering to distance themselves Sony Japan broke up their corporate ownership structure to lessen the impact of lawsuits, and damage the jurisdiction and communications trail, against Sony Computer Entertainment America.

      I wonder if Sony C.E. Australia was left untouched or in a similar position.

        Great work Ragman. I was thinking about resale price maintenance as well.

    That was word for word the exact reply I received when I complained two years ago.

    For people wondering how you can 'vote with your wallet' when all retailers in Australia are charging the same exorbitant prices.

    For physical copies try places like http://www.ozgameshop.com/ who ship their games from the UK saving you about $40 on a new release. Only downside is waiting for the game to arrive.

    For digital purchases on the PC I just have a second Steam account with a US address that I use to gift my primary account games. Adding /?cc=US to the end of store.steampowered.com will mean Steam will assume you are purchasing from the states, no VPN required. Obviously you are accessing this store from your browser of choice and not through the Steam application.

      I heard stories of people getting banned for doing the Steam thing.

        I haven't heard any confirmed stories of people being banned and I'm yet to be banned myself, I started doing this since L4D2 was released in case you're curious.

        But in all fairness I'm sure it is against the user agreement or something, but it isn't exactly something Steam cares about. If you want you can just use your own account (again accessing it through store.steampowered.com/?cc=US) and change the billing address to a US one. The one time I did this I actually was in the US on a trip when I made the purchase. Two days later back in Aus I tried to make another purchase, but Steam freaked due to me changing address so quickly, but a message to support and 12 hours later it was all sorted.

        so long as you gift from another account your pretty much safe.

        the most they can do is ban that account which has no games on it and was made solely for the gifting to another account.

        With commiting fraud if you use a US address on an AU credit card.

        thankfully there are ways around that to.

      My numerous Ozgameshop.com orders have taken over three weeks to arrive after ordering and their customer service is absolutley horrible.

      I'd like to start using play-asia but i can rarely tell if a game is PAL compatible.

      I shall be trying dungeoncrawl.com.au in the near future.

    When you have a "consumer watchdog" that can't do anything about people repeatedly getting price gouged by game publishers and supermarket duopolies, there's definitely something wrong.

    The Act needs to be amended to give the ACCC more power. It is blatantly unfair that Australia is probably the only first-world country to be price gouged by every video game publisher on the planet, and no-one can do a damn thing about it. The Government couldn't give a stuff about anything relating to videogames (pushing for an R18+ classification for years and its gotten almost nowhere) or retail in general (anyone remember GroceryWatch and FuelWatch?).

    Unfortunately, I honestly don't see this changing. The people obviously care about price-gouging being rampant in Australia (e.g petrol prices jumping upto $1.60/litre in some areas), but the govt. simply couldn't give a stuff at all. If they did care and took proper action (not those half-assed BS Senate inquiries), publishers would probably boycott selling in Australia because lets face it- we're a tiny market and if they can't price-gouge us anymore, whats the point in selling products to us when their bottom line will be smaller?

      solution to that problem (all be it a bad one), pirate. Hit the publishers where it hurts. Then maybe they will get the idea

        I might have to resort to doing that for my PC games to be honest, which is really sad considering I'm all for supporting (good) developers. Good thing I've pretty much stopped playing consoles online - PC's are way better for that. On the other hand, Publishers don't exactly get the message about piracy because of all the nazi-like DRM especially on PC games. Its sad to see that this type of atrocity is going on when you think about it, especially when its your favourite hobby. This guy on Youtube named "GamersGettingPlayed" talks about the bad trends in gaming, and makes alot of good points. Everyone should check his videos out.

      We are price gouged for a reason though. Because in our economy we get paid more.

      Minimum wage here is what 15 dollars.

      look at the US and minimum wage where its applicable is about 7 dollars

      Technically that means that products should me more expensive here as we earn more.

      Realistically it should balance out to be the same.

      The issue only arises when it becomes easy to access other country's stock through currency conversion

      kinda like how a bottle of coke over there costs 1-1.50 US. where over here it costs use 3-4 dollars depending where you are.

      Within our economy the pricing is justified in comparison. Problem is that in this day and age we really should be running off a single standardised currency in a way

    Continue to order abroad then. Perhaps then retailers will bring to bear their own pressure on publishers. For example, I purchased both the latest Red Faction and Duke Nukem for less than Red Faction alone retail (and less than Steam too).

    On a side note - How exactly is the ACCC going to control price rises above the 'estimated' cost increases from the Carbon Tax? According to this - they can't.

      Thats the thing. They can't. No-one can.

    Wouldn't this be more of a Trade Practices Act thing, not a Consumer protection thing.

      Pretty sure the Act mentioned above is the new TPA.

    just keep pirating games and watch them all complain.

    "You've got lost yourself a customer"
    "Sorry Australia, I'm a bit ..."
    "I SAID YOU'VE JUST LOST YOURSELF A CUSTOMER"
    "Yeah you can use it"

    this is why amazon. and ozgameshop will always be my friend......... LONG LIVE ONLINE SHOPPING FTW

    If People want change the first thing to do is:

    1. Stop buying games that have unreasonable prices here in Retail and Online

    2. Instead source your games overseas from UK

    3. But more importantly Support companies who aren't charging more on digital services like steam. If there sales are high then Publishers will relies that they could make more money if they lowed there price to 50-60 USD from 79-99 USD. Also importing would force distributors to find a way to lower prices (most likely take a cut off there profits) and find a way to lower prices.

    I wish Retailers would buy Grey Imports, the argument that it wont require companies like sony Australia to have presence is wrong when they are getting there money anyways from the sales. And want to advertise here to get more sales even if they are coming from overseas, they are still sales.

    The ONLY way we're going to win this (yes, win!) is if we stop buying video games from Australian retailers and instead use online stores and eBay. I've been doing this for over a six months now (with the exception of second hand titles) because I'm over it. I also save a lot of money!

      Then the retailers bitch and wonder why so many Aussies are going over seas for products like Harvey Norman has done over the last 12 months. Funny how the most rip off stores cry the loudest. Solution is simple, get competitive, bring back customer service and stop trying to make yourself rich. Stores used to want to satisfy customers, because oddly enough, we are what keeps them going. Funny how companies like Valve can offer stuff dirt cheap via Steam and get around the OFLC because apparently as they don't have an office here in OZ, our rules do not apply to them. Another option to protesting with your wallet,is make a U.S account, buy U.S points and get your DLC that way at less than half price. (along with having year old items I purchased like the Kinect actually working like intended.)Just I hate sending my money to foreign shores. But why should I be forced to support the local greed merchants?

    This is the solution I will be using-simply not buying these overpriced games. I'm not some drug addict that needs a fix here, I'm a working man that wants value for money in his entertainment. Lets let the consumer vote with his dollar.

    I wrote to the ACCC about an unrelated pricing issue, (namely Microsoft's Technet Subscription Pricing) and they copypasta'd the above response about games. I was less than impressed, and let them know it.

    I agree with all comments above regarding having a government agency that is merely a "Watchdog". All bark, no bite. The Act needs to be amended to give the ACCC more power, especially now people are aware of much we get rorted (on pretty much everything).

    When a digital only copy of a game costs more than twice as much as a in store copy, that has a manual, disc and cover, (and no doubt shipping expense somewhere along the line) when I can buy a game from the UK brand new, plus postage for less than the official market place or in store, I think that is anti competitive and borderline illegal. Add in thieving systems like microsoft points, a made up currency, and it's worse. Might cost me the guy in the UK and the U.S all 800points for a game, but how much those points cost is vastly different. Add in the inability to just buy what you need, like a game for 600 points requires I buy 1000 of them, If I don't use that 400 remainder points, that's free money for M$. You have to wonder why the hell no one is protecting Australian consumers in regards to gaming. Whatever happened to the good old "RRP"? (recommended retail price) you used to see when I was a kid on virtually every product sold? I mean look at places like EB games, they buy a game that cost $80 new like HALO reach 2nd hand for like 5 bucks, then resell it for $109. C'mon ACCC, pull your finger out and do your job, we are being criminally ripped off here.

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