Australian government questions Apple over digital content 'price gouging'

Posted:
in General Discussion edited January 2014
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.
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Comments

  • Reply 1 of 60
    nasseraenasserae Posts: 3,153member


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

  • Reply 2 of 60
    nagrommenagromme Posts: 2,834member


    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!

  • Reply 3 of 60


    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.

  • Reply 4 of 60
    mj1970mj1970 Posts: 9,002member


    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!


     

  • Reply 5 of 60
    tallest skiltallest skil Posts: 43,399member

    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!"™


     

  • Reply 6 of 60
    rogifanrogifan Posts: 10,669member
    Why in the world would Apple or any other company want to gouge consumers in Australia?
  • Reply 7 of 60
    mj1970mj1970 Posts: 9,002member


     


    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?


     


    image

  • Reply 8 of 60
    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.
  • Reply 9 of 60
    hirohiro Posts: 2,663member


    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.

  • Reply 10 of 60
    nasseraenasserae Posts: 3,153member


     


    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!!

  • Reply 11 of 60
    newbeenewbee Posts: 2,055member


    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.

  • Reply 12 of 60
    newbeenewbee Posts: 2,055member


     


     

  • Reply 13 of 60
    newbeenewbee Posts: 2,055member


     


    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.    image

  • Reply 14 of 60
    apple ][apple ][ Posts: 8,433member


     


    Quote:

    Originally Posted by newbee View Post


     


     


    Because they got it and we want it.    image



     


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

  • Reply 15 of 60
    brutus009brutus009 Posts: 356member


    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.

  • Reply 16 of 60
    genovellegenovelle Posts: 889member


     


    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!

  • Reply 17 of 60
    SpamSandwichSpamSandwich Posts: 30,852member


    More political grandstanding by politicians. Fools all!

  • Reply 18 of 60
    focherfocher Posts: 638member


     


    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.

  • Reply 19 of 60
    nasseraenasserae Posts: 3,153member


     


    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.

  • Reply 20 of 60
    focherfocher Posts: 638member


    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.


     


     

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