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Apple, Microsoft forced to front Australian pricing inquiry

updated 06:49 am EST, Mon February 11, 2013

Apple, Microsoft, Adobe receive summons to appear before inquiry

Apple and Microsoft have been forced to front a pricing inquiry in Australia to explain why many of their products are priced up to 50 percent higher than in the US. According to the Sydney Morning Herald, the House of Representatives Committee on Infrastructure and Communications has issued a summons to the two tech giants, along with Adobe. If the companies fail to comply with the inquiry, they could face legal ramifications.

The inquiry, thought to be the first of its kind in the world, was initiated after strong lobbying from Australian Labor party MP Ed Husic, who said the action wouldn't have been necessary if the companies had been more forthcoming to previous, non-legal inquiries. "These firms should have cooperated and been prepared to be more open and transparent about their pricing approaches," said Husic. "In what's probably the first time anywhere in the world, these IT firms are now being called by the Australian Parliament to explain why they price their products so much higher in Australia compared to the US," he added.

Investigations by the Australian consumer group Choice offered evidence to the inquiry showing that Australian consumers can pay up to 50 percent more than their US counterparts for the same music, video games, software and computer hardware. In one extreme example, Choice found that it would be cheaper for an Australian consumer to fly return to the US and purchase a piece of Microsoft enterprise software and still save hundreds of dollars.

Although the Australian dollar has been at or near parity with the US dollar for the past few years, Australians routinely pay at least $16 for an album while the US iTunes store charges only $10 even though the music is distribute digitally. An HD movie on the iTunes Australia store costs $30, while the HD movies on the US store can cost as little as $15. A 64GB iPhone is sold in the US for $849, while Australians will pay least $999, including tax of $91.



By Electronista Staff
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  1. terrymax

    Fresh-Faced Recruit

    Joined: 07-26-99

    64GB iPhone 5 is $1204 in Ireland

    At today's exchange rate, a 64GB iPhone 5 is $1204 (EUR 899) in Ireland. This includes 23% sales tax so would be $979 before tax, still a l the $849 that is costs in the USA.

  1. terrymax

    Fresh-Faced Recruit

    Joined: 07-26-99

    Update

    At today's exchange rate, a 64GB iPhone 5 is $1204 (EUR 899) in Ireland. This includes 23% sales tax so would be $979 before tax, still a lot more than the $849 in the USA.

  1. Eldernorm

    Fresh-Faced Recruit

    Joined: 09-26-07

    hit article??

    "If the companies fail to comply with the inquiry, the companies could face legal ramifications."

    Hmmmmm I would think that anytime the congress or such calls for a company to appear, failure to comply would have legal ramifications. So that statement is just trolling for hits. Right??

    And wondering why something cost more when you put all kinds of regulatory and tax issues on top of the base price, well, its just such a quandary. Especially to lawyers in charge of the country. They have such small minds..... usually. /s

    Just a thought. PS.. why do I have to pay more than the cost of a unit build in China, after all, they only have to inventory it, warehouse it, ship it half the way around the world, pay all kinds of weird country customs taxes, pay for regulatory compliance, etc...... Why should I have to pay that costs.....???????

    Just a mindless question.

  1. SunSeeker

    Mac Enthusiast

    Joined: 04-12-01

    comment title

    "A 64GB iPhone is sold in the US for $849, while Australians will pay least $999, including tax of $91"

    At least $999 - what confusing wording. Why not just say 'Australians will pay $999'?

    Anyway a US resident will pay a similar tax in most cases (bringing their pricing to $950ish), it is just calculated at checkout on the Apple online store because the US have different tax policies in different states - perhaps the inquiry would like to bring in some of the US financial policies and a few hundred million of their residents to help Apple achieve price parity

    Until then I'm happy to pay a little bit of a premium for my Apple products to live in Australia

    HD Movies are mentioned, but I'm willing to bet that Apple pay a different wholesale price for Content in different regions due to other entities being in control - I notice that Apps are generally very closely priced, almost certainly due to the fact that Apple created their own rules for how they are sold and developers remunerated

    Pages (Apple) for iOS is $10.49AU vs $9.99US
    1Password (Agilebits) for iOS is $18.99AU vs $17.99US
    Strata Design 3D CXi (Strata) for Mac is $549AU vs $499US

    I'm sure Apple are just mentioned for the fact that it will give the case a much higher profile since they are obviously doing more for the consumer than is ever implied in the press

    As for Adobe and Microsoft, well, I don't think they have a leg to stand on

    Adobe Photoshop ordered directly from Adobe
    Adobe Australia - AU $1519 - Full, AU $667 - Upgrade
    Adobe US - US $999 - Full, AU $399 - Upgrade

    Microsoft Office Home & Business 2013 ordered directly from Microsoft
    Microsoft.com.au - AU $299
    Microsoft.com - US $219.99

    (interestingly, Adobe apps sold through the Apple App store are less than 10% apart, far different to the disparity between Adobe Apps bought through their own online store)

  1. SunSeeker

    Mac Enthusiast

    Joined: 04-12-01

    Why does the text all run together

    Pretty messy, perhaps something to be looked at along with skelling and complete sentenc

    :-P

  1. TheGreatButcher

    Mac Enthusiast

    Joined: 06-11-00

    Oh please Aussie pols

    Everything is more expensive here because of your protectionist tariffs and taxes. You have no problem charging 100-200% more for what the same model car would cost in the US.

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