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CHOICE Welcomes IT Pricing Review Findings

CHOICE says politicians must now act to terminate the ‘Australia tax’

29 July 2013

CHOICE has welcomed today’s final report from the Federal Parliament’s inquiry into IT pricing, saying it delivers a clear blueprint to reduce the digital price discrimination faced by Australian consumers.

CHOICE provided a detailed submission to the inquiry, analysing over 200 separate software products, games and music downloads, which showed Australians pay around 50 per cent more for identical goods compared to US consumers.

“Our research shows Australians cop a raw deal on digital prices, and today’s report provides a much-needed trigger for government action to terminate the so-called ‘Australia tax’,” says CHOICE director of campaigns and communications, Matt Levey.

“In particular, we congratulate the Committee for taking aim at the practice of ‘geo-blocking’, the virtual walls put in place by global copyright owners and manufacturers to artificially carve up markets and sustain higher prices in regions like Australia.”

CHOICE says the inquiry’s key recommendations are:
  • Removing all parallel import restrictions under Copyright law, giving Australians access to cheaper, genuine goods (Rec. 4);
  • Reforming copyright law to give greater protection to consumers getting around ‘geo-blocks’ (Rec. 5);
  • Educating consumers on their rights to get around geo-blocks, and the tools available to them (Rec. 6);
  • Considering amending the law to make terms of service which seek to enforce geo-blocking void (Rec. 10); and
  • Considering an outright ban on geo-blocking if other changes don’t work (Rec. 9).
“Taken together, these are strong recommendations based on a huge amount of evidence, including the Committee’s welcome step of compelling IT giants Apple, Adobe and Microsoft to front the inquiry in April this year,” Mr Levey says.

“We now need to see this bipartisan approach translate into action in the Parliament, giving Australians the confidence and tools to bypass virtual walls and access legitimate, cheaper digital goods.”

Read CHOICE’s submission to the IT pricing inquiry and our guide for consumers to get around geo-blocking.

Notes to editors: 

  • CHOICE’s research identified some staggering examples of digital price discrimination, for example one Microsoft product where it was cheaper to pay someone to fly to the US and back – twice- and buy the product over there, than to pay the inflated local price.
  • For music downloads, CHOICE highlighted the example of AC/DC which finally hit iTunes in late 2012 with a 54% price difference between the Australian and US prices for an identical selection of songs.

CHOICE’s work on digital price discrimination

  • May 2008 – CHOICE investigates the high prices of computer products in Australia
  • May 2011 – CHOICE’s submission to Productivity Commission’s retail review finds unusually high levels of price discrimination on digital products
  • July 2012 – CHOICE makes a submission to the IT price inquiry, finding price differences of around 50% across many products
  • August 2012 - CHOICE makes a submission to the Attorney General, calling for reform to laws related to online geo-blocking
  • October 2012 - CHOICE publishes a guide for consumers to bypass online geo-blocks and access cheaper products from overseas
  • November 2012 – CHOICE publicly calls for the government to force large tech companies to front the IT inquiry (which they later did)
  • March 2013 – CHOICE tell consumers what they need to know as Apple, Adobe and Microsoft front the IT inquiry in Canberra
  • July 2013 – CHOICE reviews options and prices for streaming TV on the internet, and provides tips for consumers to get around TV geo-blocks

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