Apple called to testify in Australian price gouging probe

Posted:
in General Discussion edited January 2014
Tech heavyweights Apple, Microsoft and Adobe have been subpoenaed to a public hearing by the Australian government to address allegations of unfair pricing practices in that country.

Australia ParliamentAustralian Parliament house. | Source: Parliament of Australia


Australia's House Committee on Infrastructure and Communications on Monday officially summoned the three U.S. companies to explain why Australian market products seemingly carry higher premiums than identical wares sold internationally, reports CNET Australia. The summons (PDF link) is part of an ongoing probe investigating possible digital content and computer hardware price gouging.

"Adobe, Apple and Microsoft are just a few firms that have continually defied the public?s call for answers and refused to appear before the IT Pricing Inquiry," Member of Parliament and inquiry head Ed Husic told Kotaku Australia. "It?ll be interesting to hear specifically how all three companies defend their practices ? particularly with regards to the pricing of digital products. Considering the amount of publishers that artificially raise prices on services like Steam for Australian consumers, hopefully these summons represent a very real attempt by the Australian government to take IT companies to task on unfair pricing policies."

From the summons:
The Committee is looking at the impacts of prices charged to Australian consumers for IT products ? Australian consumers often pay much higher prices for hardware and software than people in other countries.
The probe over IT hardware and software first launched in April 2012, with the Australian Parliament investigating pricing discrepancies between Australia and other countries. As an example, earlier reports cited the cost of Adobe's Creative Suite 6, which launched last year in the U.S. for $1,299, compared to nearly $2,700 in Australia.

According to the publication, Apple and Adobe previously attended a public hearings regarding the matter, while Microsoft submitted claims to the committee.

The three tech firms are scheduled to convene at the hearing on March 22 in Canberra.
«1

Comments

  • Reply 1 of 40
    tylerk36tylerk36 Posts: 1,037member


    Obviously Australia has the idea they are getting shafted.  Digital software shouldn't cost more in comparison to the US or EU.

  • Reply 2 of 40
    hmmhmm Posts: 3,405member

    Quote:

    Originally Posted by tylerk36 View Post


    Obviously Australia has the idea they are getting shafted.  Digital software shouldn't cost more in comparison to the US or EU.





    It has always been that way. Electronics, movies, and music have always been priced quite high there. It likely carried on in purely digital formats. Stated prices include sales tax there. They refer to it as GST, so you do have to figure that 10% sales tax is factored into the price you see. Even then it's often considerably more expensive.

  • Reply 3 of 40


    They have more rich people there?

  • Reply 4 of 40
    It took them so long to realize that they're getting shafted? Not likely. I think it was more of a convenience to charge more where there was not much of a repercussion.. I hope these guys don't come up with a 'convincing' reason to charge more for Australian markets..
  • Reply 5 of 40
    hftshfts Posts: 386member
    Nothing will happen, if will blow over and we will still be cheated as we have been for decades.
    These large companies are all guilty, although it would be nice for Apple to come clean, but this would be an admission of guilt.
  • Reply 6 of 40
    hftshfts Posts: 386member
    bro2ma wrote: »
    They have more rich people there?
    No, we have a very high proportion of "Bogons", equivalent to Rednecks or Trailer Park Trash, as you would say in the US.
  • Reply 7 of 40
    Ridiculous. The problem is not pricing. It's the fact you get different prices based on the country you sell in. There should not be an "Australian App Store", an "American App Store" and so on. It's the same bloody software.
    I could understand the price being different based on software being localized, but I'm prevented from playing the US version, since it's an artificial limit.
    And give me a break on "it's due to legal requirements". This, here, is the "legal requirement"-makers questioning the prices instead if the structure.

    I haven't forgotten that DVD are artificially zoned (which is a scandal that DVD-makers never accounted for) and every time I switch countries, I'm annoyed by iTunes being country based (but iTunes bills curiously all come from Ireland for me.. how remarkable, that this is possible but not making my life simple with fair pricing).

    Note: I'm not bashing Apple here, but the whole Entertainement Industry, with the incredible weight of the RIAA behind those not-so-absurd-since-they-make-artificial-millions rules.
  • Reply 8 of 40

    Quote:

    Originally Posted by tylerk36 View Post


    Obviously Australia has the idea they are getting shafted.  Digital software shouldn't cost more in comparison to the US or EU.





    Digital software should be buyable in the US from Australia directly on Internet. End of story.

  • Reply 9 of 40
    joshajosha Posts: 901member

    Quote:

    Originally Posted by lightknight View Post


    Digital software should be buyable in the US from Australia directly on Internet. End of story.



    It should be, but often isn't.


    The selling web sites often verify the buyers location and sell from the buyers local web site,


      often at a much higher price.

  • Reply 10 of 40
    cnocbuicnocbui Posts: 3,613member


    I think a lot of the price gouging Australia experiences comes down to the well entrenched practice of local distributorships gouging heavily due to being handed a de-facto monopoly by the manufacturers that sign with them.  These deals for exclusive distribution are the legal reasons often used as an excuse, I believe.


     


    Now obviously in the case of large companies that have their own operations, distributorships are not involved, but i think those distributorships set a very profitable trend for the market which the larger companies are more than happy to cash in on.


     


    Here's a rather brutal example of how Australians are gouged.  A pair of B&W 802D speakers retails in the US for us$12,000.  In Australia, they retailed for us$24,610 in early 2012.  Lovely.

     

  • Reply 11 of 40
    entropysentropys Posts: 1,647member
    Apple hardware isn't too bad these days once you allow for an exchange rate risk of about 10% (or ten cents if you will) and then factor in the 10% GST which by law is included in the retail price.

    Apps in the appstore are pretty close too.
    But music and video on itunes is despicably expensive. No doubt becuase the local rightsholders expect the poor aussie consumer to pay for their [S]value adding [/S]lifestyles. And apple just adds its margin on top.

    There is no reason why we can't get this stuff on the US itunes store except for historic import and regional copyright restrictions. And they wonder why piracy is so rampant in this country.
  • Reply 12 of 40
    Companies should be able to charge what thy want to. Don't like Apple, buy HP. Figure it out. Secondly, I pay more for everything in NY. It sure is annoying but that's my fault for living here. This trying to control commerce and the markets is ridiculous. No one in any country is entitled or Photoshop and an iPad as a God given right.
  • Reply 13 of 40
    saareksaarek Posts: 1,123member


    Apple happily rips off anyone who does not buy from the US. Anywhere from 10-20% premium for the same equipment, quick and easy examples are:


     


    Apple TV UK Price is £99 or $155.24, now to be fair the UK includes VAT at 20% so how does it compare to the US? Well $99 + 20% = $118.80 so us Brits pay an extra $36.44


     


    Entry level 13" MacBook Pro, UK Price is £999 or $1566.78 US price is $1199, so $1199 + 20% = $1438.80 so us Brits pay another $127.98


     


    Never fear Australians, Apple screws everyone who is not an American and they can get away with it too because only Apple sells MacBook's and Apple TV's and iMac's. Sure, you could buy a Dell or an HP or any other manufacturer and pretty much pay the same as the American general public, but you wont, because you want that MacBook because it's better than the virus invested pieces of shit that everyone else makes.


     


    Sure it hurts that Apple screws you over because you're not an American, it would be nice if they treated all of their customers fairly but they are a business and as long as they can continue to bend you over and take the money from your wallet they will do so.

  • Reply 14 of 40
    Australia continually gets ripped off! I can understand some small differences due to import taxes, GST, logistics... but not the extra amounts they continually charge us!

    I will keep buying as many products as I can internationally, and hopefully prices will get fairer. Or perhaps a boycott will be in order :)
  • Reply 15 of 40
    Australians shouldn't be required to pay more--we like them!
  • Reply 16 of 40
    jragostajragosta Posts: 10,473member
    There is no reason why we can't get this stuff on the US itunes store except for historic import and regional copyright restrictions. And they wonder why piracy is so rampant in this country.[/quote]

    As you point out, copyright laws are difference (as well as other laws). If Apple ignored the copyright laws and instead chose to sell US products in Australia, everyone would be complaining just as loudly.

    You make the laws there, you get to deal with the consequences.
    saarek wrote: »
    Apple happily rips off anyone who does not buy from the US. Anywhere from 10-20% premium for the same equipment, quick and easy examples are:

    Apple TV UK Price is £99 or $155.24, now to be fair the UK includes VAT at 20% so how does it compare to the US? Well $99 + 20% = $118.80 so us Brits pay an extra $36.44

    Entry level 13" MacBook Pro, UK Price is £999 or $1566.78<span style="line-height:1.231;"> US price is $1199, so $1199 + 20% = $1438.80 so us Brits pay another $127.98</span>

    It costs more to do business in Europe. Work weeks are shorter (which means more employees to do a job). Benefits are much higher. Transportation costs are higher. I don't know if those added costs make up for the difference, but it's a moot point, anyway.

    Pricing is set by what the market will pay. If you think it's too expensive, don't buy it. If enough people think it's too expensive and stop buying, they'll lower the price. Unless someone has repealed the law of supply and demand, Apple doesn't arbitrarily set the prices. They set the prices based on market conditions.

    So all the complaining about Apple's prices should be targeted at your countrymen. Apple charges more because you're willing to pay it. That's the way a free market business works.


    Oh, and btw, AI, please hire some writers with a clue. You can't subpoena a company. Rather, you subpoena executives from the company.
  • Reply 17 of 40


    They are singling out well known companies to make a point. The whole exercise is pointless. 


     


    I am currently in Australia for work and just purchased an iPad mini for the same price as I would have gotten it for in the US. If you compensate for tax (I get a refund on GST when I leave the country) it was actually cheaper in Australia. Assuming AUD and USD are equal, and they more or less are, Australian Apple products are marginally more expensive, if at all. Some end up being exactly the same price. If we were looking at this many years ago when the US dollar was double its value to the Aussie dollar, then ok. But it hasn't been that way is a while. And besides, you can't constantly change the price of your products based on global exchange rates. 


     


    Most everything cost an exorbitant amount of money here. Everything from fast food to clothing. $10 for small value meal at McDonalds or $200 for a pair of jeans at a department store. At this point, Apple is the worst example for ripping of Aussie customers.


     


    If the government wants to question price scams, look at the auto industry. $46k for the cheapest Chrysler 300C, or $68k for the cheapest Audi TT. Car premiums here are upwards of 50%-100% over US prices, or even greater for some super luxury cars. 


     


    Where there is a difference in Apple's offerings is iTunes content. Movies and music do cost a lot more there, double or more. However, this is not Apple's problem to fix. Media is expensive here, via iTunes or not. 


     


    Another thing to keep in mind is that Aussies get paid a lot more compared to places like the US. Their national minimum wage is $15.95/hour, more than double that in the US. Also, taxes here aren't as exorbitant as you would expect. So where does it all go? The high cost of stuff. Its inflation out of control. Things are expensive just because they can be. 

  • Reply 18 of 40


    The silly court will get a lesson in international pricing. They'll learn that it's is a function of:


     


    1) Allowing a buffer for exchange rate uncertainty;


    2) Local taxes such as GST, VAT, corporate taxes (esp. if regulations require your posting a price that includes those taxes);


    3) Local regulations on warranties, take-back, end-of-product-life obligations of the manufacturer;


    4) Local costs of doing business that vary from country to country (labor costs, physical distribution, costs of carrying inventory; costs of advertising/promoting);


    5) Pricing-to-market (which, in turn, is a function of local competitive conditions, demand, perceived buyer value for the product, etc.).


     


    There are probably others.


     


    Australia can solve this problem in one stroke if they moved closer to the US, adopted the USD as their currency, adopted our minimum wage laws, and developed a Texan accent! image

  • Reply 19 of 40
    gatorguygatorguy Posts: 20,451member

    Quote:

    Originally Posted by jragosta View Post





    Oh, and btw, AI, please hire some writers with a clue. You can't subpoena a company. Rather, you subpoena executives from the company.


    http://www.americanbar.org/newsletter/publications/gp_solo_magazine_home/gp_solo_magazine_index/civilprocedure.html


     


    If I read it right, in the US a corporation can be ordered to respond under rule Rule 30(b)(6). It's not necessary to name a specific individual is it, much less an executive? The "corporation" may determine the person to respond to the order if it's not addressed to a named individual.


     


     


    Considerations in crafting the Rule 30(b)(6) notice...  the obligation of the responding corporation is to present a witness able to testify as to matters "known or reasonably available to the organization."


     


    The identity of the Rule 30(b)(6) witness. A critical consideration is who to designate as the corporate representative. As noted above, the rule does not require the person designated be the individual "most knowledgeable" about the subject matter, but there is nothing to prohibit the corporation from designating that person. Rule 30(b)(6) also does not require that the witness designated by the corporation be one of its employees. The rule indicates that a corporation may designate "other persons who consent to testify on its behalf." Sometimes the person most knowledgeable may not be available, or the corporation may decide that this person would not be the best witness to tell the corporation's story.


     


    So I believe I'm correct that essentially Apple the corporation could be subpoenaed in the US, which would mean Apple the corporation would be left to determine the person best able to comply with the order. I'm no lawyer of course, just reading the rule.We have real lawyers as members here who may be able to confirm that understanding. 


     


    That doesn't mean Australian law regarding depositions follows the same rules. They may not. AI may have been completely accurate in writing Apple was subpoenaed.

  • Reply 20 of 40

    Quote:

    Originally Posted by Gatorguy View Post


    http://www.americanbar.org/newsletter/publications/gp_solo_magazine_home/gp_solo_magazine_index/civilprocedure.html


     


    If I read it right, in the US a corporation can be ordered to respond under rule Rule 30(b)(6). It's not necessary to name a specific individual is it, much less an executive? The "corporation" may determine the person to respond to the order if it's not addressed to a named individual.


     


     


    Considerations in crafting the Rule 30(b)(6) notice...  the obligation of the responding corporation is to present a witness able to testify as to matters "known or reasonably available to the organization."


     


    The identity of the Rule 30(b)(6) witness. A critical consideration is who to designate as the corporate representative. As noted above, the rule does not require the person designated be the individual "most knowledgeable" about the subject matter, but there is nothing to prohibit the corporation from designating that person. Rule 30(b)(6) also does not require that the witness designated by the corporation be one of its employees. The rule indicates that a corporation may designate "other persons who consent to testify on its behalf." Sometimes the person most knowledgeable may not be available, or the corporation may decide that this person would not be the best witness to tell the corporation's story.


     


    So I believe I'm correct that essentially Apple the corporation could be subpoenaed in the US, which would mean Apple the corporation would be left to determine the person best able to comply with the order. I'm no lawyer of course, just reading the rule.We have real lawyers as members here who may be able to confirm that understanding. 


     


    That doesn't mean Australian law regarding depositions follows the same rules. They may not. AI may have been completely accurate in writing Apple was subpoenaed.



     


    Honestly I'm bewildered as to how you can cite American laws regarding an issue in AUSTRALIA. Yes both are common law countries but regarding corporations/ business laws one should not expect both jurisdictions to have the same legislation. 


     


    "In a show of political bipartisanship in the House of Representatives today, both Labor and the Coalition joined forces to express their frustration with the refusal by global IT companies to voluntarily give public evidence as to why Australians pay significantly more than US consumers for hardware and software.




    And both sides indicated the committee was on the verge of invoking subpoenas to force company officers to give open parliamentary evidence about their pricing policies.


     


    Source: http://www.theaustralian.com.au/australian-it/it-firms-face-being-subpoenaed-to-inquiry-on-tech-pricing/story-e6frgakx-1226505251659


     


    "The subpoena must be addressed to a person. If you wish to get documents from an organisation or a company you will need to address the subpoena to the 'Proper Officer' in that company or organisation. You should contact the organisation to make sure the address of their registered office is correct."


     


    Source: http://www.lawlink.nsw.gov.au/lawlink/lawaccess/ll_lawassist.nsf/pages/lawassist_subpoenas_step_by_step_guide

Sign In or Register to comment.