UPDATED: Tech giants face IT pricing enquiry

UPDATED: Tech giants face IT pricing enquiry

Apple, Adobe and Microsoft appear before House Infrastructure and Communications committee

Apple, Adobe and Microsoft recently appeared before the House Infrastructure and Communications committee at a public hearing into IT pricing in Canberra.

The three tech giants were summoned to appear at the hearing in February.

The committee, which was established in May last year, is investigating claims that Australians pay more for IT products than consumers overseas.

“The committee has been told that big IT companies and copyright holders charge Australians, on average, an extra 50 per cent, a practice consumers call the ‘Australia Tax,’” committee chair, Nick Champion, said.

A report by Computerworld mentioned Microsoft Australia managing director, Pip Marlow, attributed Australian law compliance, labour and rental costs, customer awareness and greater competition as reasons for product price disparities between Australia and the US.

She added that the company does not follow a standard pricing model as it believes markets differ in operations and requirements.

“The way we compete in each country can be quite unique. If you are selling into an emerging market, for example where the cost of living and the availability of technology, customer perception and competition may be completely different to another market,” she said.

Apple Australia managing director, Tony King, said the same. According to King, its resellers are free to set their own Apple hardware and software prices in Australia respective to price competition.

“We establish a price on the Apple online store and through our retail stores for a product, but our partners are free to set their prices as they see fit in the market,” he said.

King added that Apple’s product prices in Australia are not materially different from the Apple products sold in the United States and the issue of GST has contributed to the confusion of pricing disparities.

“Setting aside the daily ups and downs of currency exchange rates, our Apple product prices here in Australia are not materially different from the Apple products sold in the United States.

“Also, the US retail prices do not include sales tax. Here in Australia, of course, a price includes a 10 per cent GST. That fact alone is responsible for a great deal of confusion and has resulted in some inaccurate conclusions regarding our pricing.”

Adobe A/NZ managing director, Paul Robson, proposed Australians should consider importing the American version of its products, heading overseas to get them or purchasing a competing product if they want lower prices.

“They can choose to go to America and buy it from local American businesses. They can choose to import it from local American partners,” he said.

However, Adobe complied with the inquiry by of some of its products in Australia.

The committee has resolved to inquire into IT price discrimination, following a request from the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy.

It has also invited submissions addressing the terms of reference, to be received by July 6.

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Tags broadbandMicrosoftAppleadobeCommunications and the Digital Economysenator conroypricingit price enquiry

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