12 September 2013
CHOICE is calling on consumers to express their disappointment with Apple following the release of the new iPhone pricing which will cost Australian consumers up to 14% (excluding GST) more than consumers in the United States.
Apple’s price discrimination against Australian consumers flies in the face of the recommendations of Federal Parliament’s inquiry into IT pricing, which delivered a clear blueprint to reduce the digital price discrimination faced by Australian consumers in July this year.
“It is surprising and disappointing to see Apple launch a product with higher prices in the Australian market. Our past research has shown that Apple hardware was more or less the same across borders, once you exclude GST,” says CHOICE director of campaigns and communications, Matt Levey.
“There is no obvious reason for a price difference like this, and we can only conclude Apple is charging Aussies more for the new iPhones because they think they can get away with it.”
“Earlier this year, Apple fronted up at the Parliament's IT pricing inquiry and explained why they have no control over prices in their iTunes Store. But there is no excuse here, they can't blame the record companies or movie studios for a decision to charge Australians more for an iPhone.”
“It is disappointing that just months after we saw the spotlight fall on Apple and other tech giants for their unfair pricing, we see another major product launch and another major rip off.”
“Consumers shouldn’t be paying more for Apple products simply because they live in Australia.”
The following is a price comparison of the new iPhone models between Australia and the United States. The price “difference” is calculated using the Australian price excluding GST compared to the US price converted to Australian dollars at the exchange rate of 1AUD to US$0.93.
CHOICE provided a detailed submission to the inquiry, analysing more than 200 separate software products, games and music downloads, which showed Australians pay around 50 per cent more for identical goods compared to US consumers.
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