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Australian government questions Apple over digital content 'price gouging'

post #1 of 61
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The government of Australia has signed off on a parliamentary inquiry into alleged price gouging by Apple and other technology companies that sell digital content.

The government has taken issue with the fact that content sold through iTunes, including music and games, can be more expensive in Australia than in other overseas countries, according to The Sydney Morning Herald. The hope is that the inquiry will prompt the price of content in Australia to drop accordingly

In addition to Apple, the government will also invite Microsoft and "all the big computer and software companies," the report said, to explain why digital content costs more Down Under.

Also mentioned in the story is Adobe, which announced its new Creative Suite 6 last week. The Standard Design version of the package costs $1,299, but customers in Australia will pay up to $1,400 more for the same software, the report said.

"People here scratch their heads trying to work out why they get fleeced on software downloads," said Ed Husic, a member of the Australian House of Representatives. The government inquiry will begin later this year and will be conducted by the House of Representatives standing committee on infrastructure and communications.

iTunes


In addition, the inquiry will also look into e-book prices ? a topic where Apple is already the subject of an antitrust lawsuit from the U.S. government. It has accused Apple of illegally working with a number of book publishers to raise the prices of digital books, though Apple contends that no collusion took place in switching to a so-called "agency model" for sales, allowing publishers to set their own prices for e-books.

In March, the Australian Competition & Consumer Commission accused Apple of "misleading" customers into thinking its newest iPad runs at fast 4G LTE speeds in Australia, while LTE connectivity for the device is actually restricted to North America. Apple quickly complied by updating its online store with more prominent text informing consumers that the 4G version of the new iPad does not work with LTE networks in Australia, and also sent out an e-mail to Australian customers offering them a full refund if they are unhappy with their new iPad.
post #2 of 61

Maybe they have to  something like currency exchange rate and how it affects pricing?!

post #3 of 61

If iOS apps are truly gouging Australians the same way Adobe is with Creative Suite, then I'd say some questions need to be asked!

post #4 of 61

Why are they singling out Apple for this?  

 

Apple can charge anything they want.  

 

If you don't like the price, don't buy it.  Problem solved.

post #5 of 61

I'm truly happy for Australia and all Australians.

 

It appears that all of the other important issues that country and its citizens face have been resolved so that the government is now able to focus on the pricing (and alleged price "gouging") of things like music, games and applications for the iPod and iPhone.

 

Well done Australia!

 

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #6 of 61
Quote:
Originally Posted by NasserAE View Post
Maybe they have to  something like currency exchange rate and how it affects pricing?!

 

That can't possibly be it. And international agreements with the media companies on the rights to the content (and software companies on the rights to the software)? Why, that's "Cheap As Free!"™

 

post #7 of 61
Why in the world would Apple or any other company want to gouge consumers in Australia?
post #8 of 61

 

Quote:
Originally Posted by Rogifan View Post

Why in the world would Apple or any other company want to gouge consumers in Australia?

 

Indeed. I mean France we could all understand, but Australia?

 

lol.gif

The state is nothing more than a criminal gang writ large.

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The state is nothing more than a criminal gang writ large.

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post #9 of 61
Yeah, you're right. There is a currency exchange difference. We buy your dollar for about 97c. It was around 90c late last year. Even though our dollar is stronger than the greenback, we still sometimes get slugged double what you guys pay for downloadable content. Adobe are the worst offenders by far.
post #10 of 61

The simple answer is boxed stuff costs more because it is shipped, and digital downloads are priced relative to the physical versions.  Sucks to not be where the originals are cheaper, but it always has been and always will be that way in a free-ish market operating in supply and demand tradeoffs.  

 

Why did Fundamental As Anything run me $15.00 stateside after my Freemantle bought tape (~10 Au) died?  Same thing different direction, almost 30 years ago. , I remember being pissed about that then.

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post #11 of 61

 

Quote:
Originally Posted by Hiro View Post

The simple answer is boxed stuff costs more because it is shipped, and digital downloads are priced relative to the physical versions.  Sucks to not be where the originals are cheaper, but it always has been and always will be that way in a free-ish market operating in supply and demand tradeoffs.  

 

Why did Fundamental As Anything run me $15.00 stateside after my Freemantle bought tape (~10 Au) died?  Same thing different direction, almost 30 years ago. , I remember being pissed about that then.

 

Their major complaints are why Australians pay more than Americans when they buy music and games from iTunes. Hell, I am wondering why I am paying $4/gal here in the US while in the middle east they pay less than $0.70/gal!!

post #12 of 61

A quick look at the currency exchange rate, according to the conversion program I'm using, sets the 1.00 aus at about 0.96 us .... but yet 3 different albums on iTunes (Beatles box set, McCartneys's "kisses on the bottom" and Norah Jones's "Little broken hearts") appear to be about 80% higher in Australia (149.00-259.00 in the case of boxed beatles).... so I'm guessing that publishing rights and royalties etc. + various gov. taxes (vat?) are coming into play. I would be interested to find out exactly why.

See, in the record business, you can show someone your song, and they don’t copy it. In the tech business, you show somebody your idea, and they steal it. (Jimmy Iovine)
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See, in the record business, you can show someone your song, and they don’t copy it. In the tech business, you show somebody your idea, and they steal it. (Jimmy Iovine)
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post #13 of 61

 

 

See, in the record business, you can show someone your song, and they don’t copy it. In the tech business, you show somebody your idea, and they steal it. (Jimmy Iovine)
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See, in the record business, you can show someone your song, and they don’t copy it. In the tech business, you show somebody your idea, and they steal it. (Jimmy Iovine)
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post #14 of 61

 

Quote:
Originally Posted by NasserAE View Post

 

 

Their major complaints are why Australians pay more than Americans when they buy music and games from iTunes. Hell, I am wondering why I am paying $4/gal here in the US while in the middle east they pay less than $0.70/gal!!

 

Because they got it and we want it.    lol.gif

See, in the record business, you can show someone your song, and they don’t copy it. In the tech business, you show somebody your idea, and they steal it. (Jimmy Iovine)
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See, in the record business, you can show someone your song, and they don’t copy it. In the tech business, you show somebody your idea, and they steal it. (Jimmy Iovine)
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post #15 of 61

 

Quote:
Originally Posted by newbee View Post

 

 

Because they got it and we want it.    lol.gif

 

The same could be said for Apple. We got it and the whole world wants it.

post #16 of 61

Yeah, so... there has always been markup associated with the importing of goods.  There are all sorts of middle-men along the way that demand a cut.  Australia is the furthest from anywhere and most likely to feel the brunt of this effect.

 

So it sounds like the Australian government just wants everyone to do the math for them, on the record.  But... then what?  Will they try to enforce how much of a cut everyone gets?  Try to minimize the number of middle-men?  Don't we usually depend on the major tenets of capitalism to naturally bring these facets of business into check?

 

Well sure, I don't know anything about government, but I'm prone to think that this sort of thing is a public show to appease the masses and to make the government look better.  This won't amount to much.

post #17 of 61

 

Quote:
Originally Posted by design_editor View Post

Yeah, you're right. There is a currency exchange difference. We buy your dollar for about 97c. It was around 90c late last year. Even though our dollar is stronger than the greenback, we still sometimes get slugged double what you guys pay for downloadable content. Adobe are the worst offenders by far.

 

Our advertised prices don't include the tax which is added at checkout, but many countries require it to be included.  Apple also had to negotiate rights to sell in each country so the content owners decide the price in the end.  As far as it costing more to create physical product, there is also a greater chance that it will be copied and shared, so you sell less copies.  Now you can re-download lost content that was purchased years ago.  Lose you CD or DVD or better yet playstation game and go back to the store you bought it from for a free replacement.  Good luck with that!

post #18 of 61

More political grandstanding by politicians. Fools all!

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #19 of 61

 

Quote:
Originally Posted by NasserAE View Post

Maybe they have to  something like currency exchange rate and how it affects pricing?!

 

If anything, that should lower the Australian prices because the AU dollar is strong than the US one.

post #20 of 61

 

Quote:
Originally Posted by focher View Post

 

 

If anything, that should lower the Australian prices because the AU dollar is strong than the US one.

 

It wasn't always like that and there is no guarantee that it will stay like this. It is not a big deal for customers to pay a dollar or two more but it is for developers. Before Apple adjusted their rates a year or so ago I used to get less money from other countries for the same apps. You have to look at this from the other party perspective as well.

post #21 of 61

As an American who lived in Australia for six years (with a recent return to the USA), it is absolutely true that Australians are gouged on pricing for a wide range of products - both physical and virtual. Price differences are common, as tax rates (Australia, for example, has a 10% GST on all goods and services) but that does not at all account for many of the price differences that can be found. For Australia, years ago the exchange rate was inverted. The US dollar was much stronger than the AU dollar. That changed, but the pricing structure was never changed.

 

iTunes was always a really obvious one for me. Luckily, I had my US credit card that allowed me to rent/purchase based on US prices. iTMS does not use geolocation based on IP for pricing but uses the country of your credit card.

 

The worst thing I discovered wasn't even the pricing difference based on country. I had a 1st gen ATV and a 2nd gen ATV, but noticed that they gave VERY different pricing in iTMS for video purchases and rentals of the same items. The 1st gen was always much cheaper.

 

 

post #22 of 61

They are asking many the same questions in Canada where its dollar is also stronger than the U.S. one. Pricing can be complex, and many factors can be involved.

post #23 of 61

 

Quote:
Originally Posted by NasserAE View Post

 

 

It wasn't always like that and there is no guarantee that it will stay like this. It is not a big deal for customers to pay a dollar or two more but it is for developers. Before Apple adjusted their rates a year or so ago I used to get less money from other countries for the same apps. You have to look at this from the other party perspective as well.

 

No, actually you don't need to look at this from the other side. Pricing is something that has to be done at the market level. Every global company selling goods and services defines a pricing corridor that is viable for across markets. Regulators in countries are not going to let companies gouge customers. Yes, exchange rates change but in the AUD/USD situation the change has been drastic over the last 6-7 years. Companies can't just leave the old pricing model in place and be surprised when regulators step in.

post #24 of 61

 

Quote:
Originally Posted by focher View Post

 

 

No, actually you don't need to look at this from the other side. Pricing is something that has to be done at the market level. Every global company selling goods and services defines a pricing corridor that is viable for across markets. Regulators in countries are not going to let companies gouge customers. Yes, exchange rates change but in the AUD/USD situation the change has been drastic over the last 6-7 years. Companies can't just leave the old pricing model in place and be surprised when regulators step in.

 

Apple just updated their apps price matrix few months ago. They did lower the Australian app store pricing more than 30% based on exchange rates. Do you expect them to change their pricing every month?

post #25 of 61

 

Quote:
Originally Posted by NasserAE View Post

Maybe they have to  something like currency exchange rate and how it affects pricing?!

 

Perhaps it might have been a good idea for you to check the exchange before making such a comment?!

post #26 of 61

 

Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

Why are they singling out Apple for this?  

 

Apple can charge anything they want.  

 

If you don't like the price, don't buy it.  Problem solved.

 

They aren't, Microsoft is also included in this.

post #27 of 61

 

Quote:
Originally Posted by MJ1970 View Post

I'm truly happy for Australia and all Australians.

 

It appears that all of the other important issues that country and its citizens face have been resolved so that the government is now able to focus on the pricing (and alleged price "gouging") of things like music, games and applications for the iPod and iPhone.

 

Well done Australia!

 

 

Uhh so you think international companies charging double, if not many time more, for digitally downloaded content is not an important issue? Maybe if it was happening to you then you might give a crap.

post #28 of 61

 

Quote:
Originally Posted by brutus009 View Post

Yeah, so... there has always been markup associated with the importing of goods.  There are all sorts of middle-men along the way that demand a cut.  Australia is the furthest from anywhere and most likely to feel the brunt of this effect.

 

So it sounds like the Australian government just wants everyone to do the math for them, on the record.  But... then what?  Will they try to enforce how much of a cut everyone gets?  Try to minimize the number of middle-men?  Don't we usually depend on the major tenets of capitalism to naturally bring these facets of business into check?

 

Well sure, I don't know anything about government, but I'm prone to think that this sort of thing is a public show to appease the masses and to make the government look better.  This won't amount to much.

 

Umm how does this apply to downloaded content? This is what is being investigated.

post #29 of 61

"Why are they singling out Apple for this?  

 

Apple can charge anything they want.  

 

If you don't like the price, don't buy it.  Problem solved."

 

 

How about the other way around? Let the Autralian government set/regulate the prices and then Apple can decide whether or not to continue doing business down under. Why not let all governments set/regulate the price of everything? That's basically what some are proposing when they yammer on about fairness and entitlement and rights. Do people have a right to buy non-essential, optional products at a price they "feel" is fair? Price gouging on gasoline, water, food, housing is one thing. I believe there is no such thing as price gouging when it comes to entertainment like music and movies. Le the market decide.


Edited by lkrupp - 4/30/12 at 1:57pm
post #30 of 61

 

Quote:
Originally Posted by lkrupp View Post

 I believe there is no such thing as price gouging when it comes to entertainment like music and movies. Le the market decide.

Probably because it's not happening to you I imagine....

 

post #31 of 61

 

Quote:
Originally Posted by fredaroony View Post

 

 

Perhaps it might have been a good idea for you to check the exchange before making such a comment?!

 

Maybe you should check the exchange rate when Apple changed their price matrix before making such comment! Apple did reduce their overall Australian app store prices more than 25%.

post #32 of 61

 

Quote:
Originally Posted by NasserAE View Post

Maybe they have to  something like currency exchange rate and how it affects pricing?!

 

Maybe it has something to do with the Australian Recording Industry Association (ARIA), our movie and software industries and book publishers who have fought for years to stop parallel imports and have a major influence in setting prices, which is what should be looked into.

 

Although the pricing is higher, it has improved in some area especially Apps which have lined up with American prices after our dollar gained parity.

 

Music prices suck, Jack White's new album is $9.99 in the US and $16.99 in Australia, we still pay $1.69 a song, the US pays $0.99.

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Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #33 of 61

 

Quote:
Originally Posted by NasserAE View Post

 

 

Maybe you should check the exchange rate when Apple changed their price matrix before making such comment! Apple did reduce their overall Australian app store prices more than 25%.

 

I don't need to since I actually live in Australia and know what the exchange rate has been for the last couple of years. Reduced it 25% but it's still a lot more than the US pays so your argument has no weight.

post #34 of 61

 

Quote:
Originally Posted by fredaroony View Post

 

 

I don't need to since I actually live in Australia and know what the exchange rate has been for the last couple of years. Reduced it 25% but it's still a lot more than the US pays so your argument has no weight.

 

Really?! Do you pay GST over that price you paid for that app? How much is that tax? The US prices do not include sales tax. 

post #35 of 61

This is a good thing in my opinion but at least Australia gets the iBookStore.

 

How many years has it been going now and still nothing here in New Zealand. Same with TV content.

 

The weird thing about it is the NZ iTunes Store is actually run from Australia. Work that one out.

post #36 of 61

 

Quote:
Originally Posted by fredaroony View Post

 

 

I don't need to since I actually live in Australia and know what the exchange rate has been for the last couple of years. Reduced it 25% but it's still a lot more than the US pays so your argument has no weight.

 

Actually for Apps it the same.

 

If Apple dropped their music prices to match the US, ARIA would step in whining on how unfair it is to "the artists".

 

Our pricing is higher because the pricing of physical media is higher and the old industry stalwarts do not want to compete with lower digital pricing, which they say would wipe out Australian industries.

 

I'm working on a new song:-

 

"torrents are free,

with iTunes they work quite,

nic-e-leee"

 

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #37 of 61
Quote:
Originally Posted by design_editor View Post

Adobe are the worst offenders by far.

I'll say. For a $1299 product they are charging $1400 more. At least, according to the article.

"Also mentioned in the story is Adobe, which announced its new Creative Suite 6 last week. The Standard Design version of the package costs $1,299, but customers in Australia will pay up to $1,400 more for the same software, the report said."
I’d rather have a better product than a better price.
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I’d rather have a better product than a better price.
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post #38 of 61

 

Quote:
Originally Posted by hill60 View Post

 

I'm working on a new song:-

 

"torrents are free,

with iTunes they work quite,

nic-e-leee"

 

 

Thief!

post #39 of 61

This headline of this story completely misrepresents the original SMH article which it apparently references.

 

It is NOT specifically about Apple.

 

Apple has NOT been questioned.

 

They MAY be INVITED to appear before a Parliamentary Enquiry along with other vendors who fall within the terms of reference of the enquiry.

 

The truth is that the Government has announced that they PLAN to setup an enquiry into alleged price gouging of digitally delivered content.  This isn't a law suit, no one is actually accused of anything.  This is the Government, on behalf of the Australian people (of which I am one), wanting some answers to a various legitimate questions.  Thats all!

 

With regard to Apple, The Parliamentary Enquiry will find, what I already know, that for Apps we pay essentially that same as our US brethren, give or take a little for exchange rates and taxes.

 

And that Music costs more here because of the different agreement Apple has with local music companies.

 

On the whole I think this article is rubbish which, at best, misrepresents the truth and at worst seems to attempt to foster some kind of AUS/US dissent.

 

post #40 of 61

 

Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

 

 

Thief!

 

My song is called, "Fair use, a work of fiction".

 

 

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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