ADJOURNMENT - Economy

Back in March I spoke about the price differentials that exist in relation to products sold in Australia, compared to overseas.

I didn’t imagine it would trigger the response that it did – and I’ve received a wide range of emails and calls complaining about the way Australian consumers and businesses have been, frankly, ripped off.

Back then I put the spotlight on a particular company, Apple.

I won’t go into detail now about the differences – I did at the time.

It was clear that the products that Apple was manufacturing and retailing – there was a price difference.  Even the products of other manufacturers sold by Apple via its website had some massive differences.

So I wrote to them in March.

Amazingly, at the time, I was quietly warned by IT journalists and consumers not to expect a response.

But chase them up I did.  My office followed them up a number of times.

They promised that by 16 July Apple Australia’s Managing Director Tony King would personally respond to the concerns raised in March, once he returned from leave.

In the meantime, Apple began to reduce the prices of the apps it sells via iTunes – and I congratulated them for it, but indicated I wanted to see where they would head with hardware costs.

Yet, only a week later, it became clear Apple were not going to move on this issue.

Tech website Delimiter reported that Apple was set to hit consumers again - their new MacBook Air was estimated to cost up to $300 more than US consumers.  The new Apple Thunderbolt display up to $270 more.

16 July came and went.  Apple refused to respond.

I’m just amazed by their behaviour: they’ve snubbed consumer, media and parliamentary interest in this matter.

But they’re not the only ones with a case to answer for these glaring price differentials.

Some other culprits.

• PC manufacturer Lenovo ThinkPad X1 laptop launched in May costs $1,959; despite it selling in the US for as little as $1,399.

• Microsoft’s flagship cloud productivity suite Office 365 – costs 76 per cent more than the US.

• Adobe – this is incredible – Adobe’s Creative Suite 5 costs US$699 but in Australia nearly $1,200.

• Gamers may pay up to 60 per cent more here compared to the UK or US.
 
Consumers have noticed this.

The media has noticed this.

And now, it appears, even the Productivity Commission has noticed this.  Here’s what they said in their recently released report into Australia’s retail sector:

“The Commission is aware of the longstanding practice by which some international suppliers set differential regional prices. This effectively treats consumers in one region as willing, or able, to tolerate significantly higher prices than those in other countries.

They go on to say: Some international suppliers have attempted to defend such price discrimination as due to the cost of supplying a remote and relatively small market like Australia, which in some cases has its own unique requirements. These arguments in most cases are not persuasive, especially in the case of downloaded music, software and videos, for example, where the costs of delivery to the customer are practically zero and uniform around the world.

The Commission’s summed it up neatly – the arguments are simply not, in their words, persuasive.

It’s well known as a nation that we’re early adopters of technology.

But being early adopters has definitely come with a price.

If you’re a small business, needing the latest software to help keep pace with change in your business or be more productive, you shouldn’t be hammered by these price differences.

And younger people, with less spending power but with a demand for these products, should not be hit with these variations.

Families that also want to get access to technology, whose impact has been far reaching in our homes and lives, shouldn’t be fleeced for the sake of Silicon Valley’s bottom line.

These companies wouldn’t do this to consumers in their home countries – why do it to ours?

I have raised this matter within government and certainly believe that the Productivity Commission’s views on this are compelling.

If IT companies aren’t prepared to be transparent about their pricing decisions, then perhaps it’s time for our pricing watchdog the ACCC to take up the case for long suffering consumers and carry out a formal inquiry into why these prices differ so wildly.

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Ed Husic MP
Federal Labor Member for Chifley


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