Three technology giants have defended the high prices that Australian consumers are paying for their products.
Representatives of Apple, along with fellow technology firms Microsoft and Adobe, appeared before a federal parliamentary committee hearing into the pricing of their products in Australia.
The investigation was set up by following a long campaign by Labor backbencher Ed Husic, who has accused some information technology companies of “ripping off” Australian consumers.
Last year the inquiry heard examples of an Arctic Monkeys album costing $17.99 on iTunes in Australia but the equivalent of $13 overseas, and the movie Toy Story costing $24.99 in Australia but about $10 overseas.
But Apple’s Tony King defended his company’s Australian prices when he fronted the committee today.
He said part of the reason was higher costs charged by the entertainment industry for content destined for the Australian market.
“Price considerations must go well beyond simply looking up a currency exchange rate,” he said.
“For example, Apple must consider differences between countries in product costs, freight charges, local sales taxes, levies, import duties, channel economics, competition and local laws regarding advertised prices.”
Microsoft representative Pip Marlow told the hearing it charges consumers varying prices for the same products in different countries.
“We don’t believe that every market is the same,” she said.
“If you are selling into an emerging market for example, where the cost of living and the availability of technology and the availability of customer perception there, the competition might be completely different [compared] to a different market.”
“If we price our products too high, then our customers will make different choices.”
Adobe’s Paul Robson admitted it charges more for some products bought from its Australian website and blocks customers from buying cheaper products from its overseas sites.
“I run a local operation, that operation has costs, those costs include the salaries of our staff, the leases on our buildings,” he said.
In justifying the higher prices he said the Australian website provides a customised retail experience.
The three companies had earlier refused to appear but were warned if they failed to turn up they could be held in contempt of Parliament, which carries a range of possible penalties including fines or jail time.
Committee chairman Nick Champion says the inquiry has heard from many Australian consumers and organisations frustrated at the prices charged for digitally downloaded software, computer games, music, movies, and e-books.
“We’ve received evidence that big IT companies and copyright holders charge Australians, on average, an extra 50 per cent just because we live here, a practice referred to by consumers as the ‘Australia Tax’,”‘ Mr Champion said.
Matt Levy, head of campaigns for independent consumer organisation Choice, says Australian consumers should not have to pay so much more.
“In Australia, you pay on average 52 per cent more than an American consumer for the same top 50 iTunes songs,” he said.
“We’re talking about a product here which doesn’t have the same sorts of overheads that industry often talk about in terms of rent, in terms of logistics and distribution.
“It’s the same file being downloaded more or less from the same server, but a 52 per cent price difference if you happen to be Australian.”
The editor of technology blog Gizmodo, Luke Hopewell, says Adobe is one of the worst offenders.
“They’ve been selling a piece of software called Photoshop – Photoshop was selling for $2,500 more in Australia than it was selling for in the US and that’s even when it’s being distributed online,” he said.
“You don’t even get a physical disk, you actually have to download it online there’s no shipping cost, there’s no hardware costs.
“It’s really interesting to see why they are charging that and the Government wants to know what’s going on.”
Mr Hopewell says he hopes the inquiry brings change.
“Mostly I’m looking forward to seeing a bit of transparency and if we can’t get a bit of transparency, at least we can get a bit of squirm from the companies who try and dodge the MPs questions.” Read story