Featured, News - Written by Renai LeMay on Thursday, August 18, 2011 11:13 - 41 Comments
Labor MP wants ACCC enquiry into Aussie tech tax
news Federal Labor MP Ed Husic has widened his complaint about price markups on Apple products in Australia to include other vendors such as Adobe, Microsoft and Lenovo, raising the possibility that an enquiry could be held into the matter by the Australian Competition and Consumer Commission.
The member for Chifley first raised the matter in Parliament in late March, noting he would write to Apple Australia managing director Tony King on the matter. The MP linked the debate to the issue of online retailing, noting that many consumers knew that the instant they got on the internet, they could easily see the price differentials that existed between products bought in Australia and those purchased overseas. However, in a follow-up speech last night (Hansard PDF), Husic noted Apple had not responded.
“Amazingly, at the time, I was quietly warned by IT journalists and consumers not to expect a response,” he said. “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, Husic noted, Apple had started reducing the prices it charged Australians for buying apps through its iTunes store, bringing the nation more into line with US pricing — a move he congratulated them for at the time.
“Yet only a week later, it became clear that Apple was not going to move on the issue,” the MP added. “Tech website Delimiter reported that Apple was set to hit consumers again. Its new MacBook Air was estimated to cost up to $300 more than US consumers would have to pay, and the new Apple Thunderbolt display would cost up to $270 more.”
“July 16 came and went. Apple refused to respond, and I am staggered by their behaviour; they’ve snubbed consumer, media and parliamentary interest in this matter.” Apple has repeatedly been invited by Delimiter to respond to Husic’s comments, and the broader issue of pricing, but has not done so.
Husic also noted he was concerned about the issue of what he described as “glaring price differentials” with respect to other “culprits”, naming Lenovo, which slugged Australians with a $560 markup on its ThinkPad X1 laptop when it was released locally in May, Microsoft, which heavily marked up its Office 365 product in Australia when it launched several months ago, and Adobe, which has regularly marked up its Creative Suite products substantially upon launch in Australia, describing some of the prices as “incredible”.
The three vendors have this morning been invited to comment on the matter of their Australian pricing, and on whether they would welcome an enquiry into the matter.
Video game retailers were also mentioned by Husic, with the MP stating that Australians paid “up to 60 percent more” for the same games than residents in the United States.
The MP also highlighted comments recently made by the Productivity Commission in its recent draft report into the retail sector. Like Husic, the Commission singled out Apple, as well as a number of other suppliers, for their higher Australian pricing, noting that arguments for marking up products for sale in Australia because of different market conditions were “not persuasive”, especially when it came to downloaded music, software and videos — where the distribution cost was negligible.
Husic last night said Australians should not be “fleeced for the sake of Silicon Valley’s bottom line”. “These companies would simply not do this to consumers in their home countries. Why do it in ours?” he asked. The MP said he had raised the matter within the Federal Government, and believed the Productivity Commission’s views on the matter were compelling.
“If IT companies are not prepared to be transparent about their pricing decisions, then perhaps it is 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,” said Husic.
There’s no doubt that Husic’s comments here have a great deal of legitimacy. The term “Australian technology tax”, which has come into popular use over the past year or so, reflects a growing sentiment within the nation’s technology community that there is sparse justification for charging Australians more than our US cousins for the exact same technology goods.
The issue is particularly contentious, as Husic noted, when you consider prices around software, music and video content, which is usually downloaded from the exact same sources online but often slapped with a markup for Australians. It’s common practice for online outlets such as the iTunes store, Valve’s Steam gaming platform, Microsoft’s Xbox Live platform, Adobe’s web site and others to charge Australians more for the exact same content from the exact same server.
It’s possible, of course, to argue that Husic is just one MP who’s got a bee in his bonnet about this particular issue — and he’s a fairly new MP, having been elected last year during the 2010 Federal Election. However, the politician is, after all, part of Labor, who currently holds power, and he personally has a deep history within the Australian union movement which suggests he is not without influence within this side of politics.
Industry observers may remember Husic as the former national president of the Communications, Electrical and Plumbing Union, one of Telstra’s main unions. In this role Husic was no stranger to taking on the big technology companies.
In addition, there is no doubt that this issue will simply not go away. Over the past few years, although the trend of globalisation has continued to mean increasingly uniform delivery of products and services internationally, pricing has not followed suit outside the US, leading to a deep-held frustration about the issue in countries such as Australia.
With the possible exception of Labor’s Internet filter project, I would argue that this issue is one of the issues that Australia’s technology community is most angry about at the moment — and that anger will not dissipate until vendors start implementing more just pricing structures locally.
Among others, I’m tired of hearing stories from readers who have flown to the US, taken a few days’ vacation and picked up a few copies of needed Adobe software, then flown back and still come out ahead compared with what they would have spent if they had bought the same software in Australia. This should not be possible … and yet right now, it certainly is.
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