Apple, Microsoft, and Adobe are summoned to explain higher prices of tech goods in Australia

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Apple, Microsoft, and Adobe have all been summoned to appear before a pricing inquiry regarding the higher prices Australian consumers have to pay for tech goods compared to those of other economies. Here’s what the lower house committee had to say in a statement:

“The committee is looking at the impacts of prices charged to Australian consumers for IT products. Australian consumers often pay much higher prices for hardware and software than people in other countries.”

This pricing inquiry was set up to examine consumer advocacy groups claims of price discrimination for Australians on technology, music, games, software, and gaming and computer hardware.

Consumer lobby group Choice  says that Australians pay 73 percent more on iTunes downloads than the United States on average, 69 percent more on computer products and a ridiculous 232 percent more on PC game downloads. Office software is 34 more percent more expensive, and hardware is 41 percent more expensive.

Apple and Microsoft have made submissions to the committee and argue that freight, local taxes and duties, and foreign exchange rates are all factors that make prices different across different jurisdictions. Representing Adobe is the Australian Information Industry Association, and they have submitted to the committee that the  ”costs of doing business in Australia are higher than in many other countries.”

[via ABS-CBN, image via Rodrigo Gianesi]

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10 comments

  1. jayesstee

    @Ashraf: Sorry Ashraf, I agree that you are (unusually) off target with this one.
    The reason that they charge more is because they can!
    During the 80′s and 90′s, software was twice the US price in the UK and hardware was at least 50% more.
    Holidays and business trips in the US were always an oportunity to by the latest DOS/OS, Lotus or other progs. at what to me was a discount.
    I even priced up an IBM Thinkpad as giving a big saving even allowing for buying a UK power lead/charger. Only a tipoff that UK Customs were on the look out for these stopped me.
    Our prices only more or less equalised when “our” Tony Blair cosied up to your George W Bush.   Wonder what Blair did for Bush in return?

  2. Patara

    To show a comparison, Corel AU charges $129.99AU for the download version of PSPX5 Ultimate. In US the same download version is $79.99US. If an Aussie used a US address to register and bought through the US store they would pay approx $79.99AU due to the exchange rate. There is no way Corel can justify that price difference for a download version.
    I purchase all Games for my grandkids through the UK store the Ozgameshop. I can save up to $50 compared to Aust prices, get it posted for free and it usually arrives in a week. Plus on top of that every sale earns bonus points and it doesn’t take long to reach 5000 which equates to a $5 discount.

  3. Trev (Down Under)

    How can foreign exchange rates be blamed, the Australian dollar has generally been above parity with the US for a couple of years now. Consumer lobby group Choice is a well respected identity here in OZ. Glad I don’t buy PC games!

  4. Ashraf
    Mr. Boss

    @Godel: I dont know Australian laws, so I am only speculating. Is it possible companies are simply charging more because they can? Sure it is; as much as they demand and supply, they also understand elasticity of demand. However, 2x the price “just because they can”? That is a bit much forme to swallow. There is some reason why this is happening and my guess is the laws. There could be more involved than just VAT. Does this trend hold true for local tech companies too? How about other industries?

  5. Godel

    @Ashraf:
    Absolute garbage in this case. The big software companies like Adobe and Microsoft are charging >100% extra sometimes for products that are download only, and have online support or phone support only, probably from India or Pakistan.

    Australians pay a goods and services tax (VAT) of 10% which should account for 9.09% of the final price. It doesn’t explain the 50% to 100% markups that the companies are charging.

  6. Ashraf
    Mr. Boss

    At the risk of sounding too pro-corporation, companies understand basic supply and demand, i.e. lower price = higher demand. If a company is offering a product at two places A and B and the price at B is significantly higher than A, there is a reason for it. This reason could be related to production, geographic, laws, etc. — a variety of factors. In this particular situation, because the trend is across pretty much all tech products and not just one specific company, my guess is the fault lies with Australian laws. It would behoove the committee looking into this to listen to what Apple, Microsoft, and Adobe say and adjust accordingly.

  7. Seamus McSeamus

    Since most tech is made in Asia, logic says that such items should actually be cheaper in Australia than in the US, given that shipping distances are shorter and should be less expensive.

    Why a digital download would cost more is beyond me. If I were an Aussie, I’d be pissed.

  8. Enrique
    Author/Staff

    “Every one else is doing it.” Nice!

    I have a friend that moved over to Australia and that’s one of the first things he complained. All the tech stuff, and video games, are way more expensive.

  9. Rob (Down Under)

    I remember noticing in the 70′s, 80′s, 90′s that practically everything was half the price in the US.
    There has been an unwritten agreement (probably even non verbal agreement) amongst sellers to charge twice as much for everything to the Australian shoppers.
    Ikea has been exposed for doing the same thing.
    So I have the appropriate defense for Apple, Adobe, and Microsoft to use at the pricing inquiry -
    “Every one else is doing it”