Tech giants to front inquiry

Parliament calls on Apple, Adobe and Microsoft to explain high IT prices.
 
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01.Three companies summonsed

IT-pricing-lead

CHOICE has welcomed a move by the parliamentary committee investigating the prices of computers, software, games and digital music to force international companies to front up and explain their higher prices in Australia.

Apple, Adobe and Microsoft are being summonsed to appear before the inquiry at a public hearing scheduled for 22 March.

To date the industry has been represented by the Australian Information Industry Association (AIIA), which has refused to give information on specific companies. The AIIA has instead rehearsed a list of excuses; notably that the allegedly higher costs of honouring warranties under the Australian Consumer Law are pushing up prices.

However, CHOICE rejects these claims, and suggests that if companies find Australian warranties too onerous, they may want to reassess the quality of their products.

No more excuses 

A CHOICE submission to the parliamentary inquiry last year looked at a selection of popular products and found that Australians are paying on average 34% more for software, 52% more for iTunes music, 88% more for Wii games and 41% more for computer hardware than US consumers.

The research indicated that the majority of these price discrepancies were likely due to price discrimination from large international firms.

Now the companies themselves are being forced to front the inquiry, CHOICE is calling on them to come to the hearings prepared with answers and not just excuses.

Adobe reduces prices

Shortly after its summons was issued Adobe pledged to reduce the prices of its Creative Cloud suite products in Australia. Adobe told The Financial Review that it plans to cut the annual subscription to the online version of its full software package from $62.99 per month to $49.99 per month. Meanwhile individual software subscriptions will be cut been cut to $19.99 per month. 

However, this is only a partial victory for consumers as software sold through retailers will continue to be priced at higher levels. The price cuts only apply to personal subscriptions, so there is no relief for Australia's business owners.  

While providing some relief for ripped-off Australian consumers, CHOICE believes Adobe's move does not go far enough. 

"If Adobe was genuine about treating consumers fairly it would have reduced prices across all of its products," says CHOICE CEO Alan Kirkland.  

"Consumers should be very careful when buying Adobe products because you’ll still be paying a premium price simply because you are living in Australia."

CHOICE is calling on Adobe and all other technology companies to put an end to price discrimination across all of their products. 

Still more to be done

CHOICE is also calling on the parliamentary committee to take other actions to reduce prices in Australia. We have recommended that the government investigate whether measures used to sustain international price discrimination, like geo-blocking, are anti-competitive.

CHOICE has also created a consumer guide for navigating around international price discrimination, so that consumers can start accessing cheaper legitimate products now.

You can help CHOICE's campaign by signing up as a campaign supporter today. 

 

 
 

 

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