blog Liberal NSW Fair Trading Minister and Liberal MP Anthony Roberts has added his voice to the debate about price markups on technology goods sold in Australia, claiming iconic technology giant Apple is “price gouging” the Australian public when it comes to digital goods such as films, music and software. The Daily Terrorgraph quotes Roberts as saying:

“This is serious price gouging and here is an organisation that holds itself up to be especially open and transparent. In fact what we’re looking at is something that is very much a rotten apple. Where the huge price disparities occur is with music and movie downloads and it often targets consumers who can least afford it.”

The news comes as Federal MP Ed Husic, who harks from the opposite Labor side of the fence, has recently intensified his ongoing push to bring Australian technology prices into line with those charges overseas. Husic, who has criticised companies such as Apple, Adobe, Lenovo and Microsoft on the issue, has discussed the matter with the Treasury and the Productivity Commission and raised the issue in parliament several times over the past few months.

There are still a number of price differences between Apple products and third-party content sold through Apple’s platforms in Australia, compared with the US market where the company is headquartered. However, the company has taken steps over the past few months to harmonise much of its pricing between the US and other countries, including Australia.

Image credit: Bruno Cordioli, Creative Commons

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1. Mark
   Posted 05/10/2011 at 2:10 pm | Permalink | Reply

   clearly he isn’t up to date with things like prices and exchange rates…or maybe he just isn’t very good with math. As an example the ipad 2(base model) is US$499, with gst thats AU$577. Apples price is Australia is $579

2. jack
   Posted 05/10/2011 at 2:41 pm | Permalink | Reply

   Someone needs to inform Liberal MP Anthony Roberts that ‘price gouging’ isnt a real thing, and businesses in Australia are free to independently set the prices for their goods and services as they see fit.

   • Bevan
     Posted 01/04/2012 at 10:45 pm | Permalink | Reply

     Its true to say that businesses, importers, distributors, retailers etc have the right to set their own prices for their goods they import or manufacture and services they provide, hence free enterprise. Prices are often set at what the Australian market is prepared to pay or if you like FORCED to pay. This often means massive markups on imported goods which are available overseas much cheaper.
     The lack of competition, can be organized by when you become the Australian distributor, no one else can by-pass you and source that product cheaper, as you have a contract with the manufacture locking all else out. A lot of this goes on in Australia, and this allows you to massively and unfairly jack up the prices. IKEA Furniture charge 30%+ per item more here than overseas, and the reason given is that is what the Australian market is prepared to pay, not what they should pay, or the cost + a far go margin. The claimed extra transport costs by some businesses are all lies to hide the GREED, and the rip-offs.
     Price gouging is very real in Australia, its a shocker with clothing, a pair of Nike shoes, RRP $150 in Aust. to make and ship just $10 in china.
     Australians can fight back by buying on-line and by-passing the Recommended Retail RIP-OFF, and this is forcing retailers to drop prices as they cannot move stock as quickly. A lot go to a retail store to try the product and then walk out and buy on-line saving way 50% or more, hehehe.. Some retailers now are charging you to try on clothes you don’t buy, but this screws your business.. So Buyers do have power, to keep the greedy retailers and business under control. The Australian business model is simple:- “The end user gets RIPPED OFF” Only sneaky on-line overseas bypassing is preventing price explosions, as the greedy just get more greedy, wanting to be million airs on the first sale. The ugly side of FREE enterprise.

   • Bevan
     Posted 02/04/2012 at 10:27 am | Permalink | Reply

     Price gouging is standard business practice, however it’s not normally described like this as its sounds greedy and negative. The typically used terminology is market price. Where the market is often FORCED to pay a high unfair price, where competition fails. Thanks to the Internet, there is now a back door retail rip-off bypass option available for consumers, or end users.

3. krzystoff
   Posted 05/10/2011 at 3:16 pm | Permalink | Reply

   @Mark
   refer to iPhone 4S (16GB) announced today:
   outright prices US$499 vs AU$799
   exchange rate is currently USD0.9406 = AUD1.00
   even with taxes and conversion that amounts that would be no more than ~AU$583, so $799 is a 27% markup.

   BTW: the iPad 2 base model is currently $514 + state tax (between 0% – 9.75%)

   • TediousApplePricing
     Posted 06/10/2011 at 8:15 am | Permalink | Reply

     that US price is not outright its subsidised by the carrier apparently.

4. Janedoe1215546
   Posted 05/10/2011 at 5:28 pm | Permalink | Reply

   The NSW minister finishes his media release with a “hope”. How quaint.

5. Peter
   Posted 06/10/2011 at 4:45 pm | Permalink | Reply

   Funny thing is that all of the companies we buy our goods from aren’t charities. If they can make a profit, they will.

   Why is it that a company making a profit is at fault, when the government creates new and interesting ways to tax its citizens?

   Might as well tell all the manufacturers that the cost to import equipment is now free, as long as they create a uniform retail cost, globally. Would the NSW Liberal party agree to that?

   • Bevan
     Posted 01/04/2012 at 11:14 pm | Permalink | Reply

     Yea you bet, if they can make a profit they will, if they can make a massive profit, and take advantage of there market position they will, They will unfairly profit at your expense, they will even price fix and under cut to destroy their competitors, then prices will sky rocket.
     You would be shock to see how many Australian business and retailers, make very healthy over the top margins on the products they import.
     This is the ugly side of free enterprise. It seems that almost all business are up to it too. Insurance companies have been engineering their policies legal wording to escape their obligations to pay out for flood victims in Queensland. A year later, they then jack up all the premiums, due to the flooding, yet only a small portion of claims were honored. So they are double dipping, not paying out then increasing premiums.
     Wind Screen O’Brien overcharge for their car windscreens repairs because they have the name, eg:- O’Brien’s quote $850, competitors no name small business $199, same car, same windscreen repair.
     What happens is the cheaper windscreen repairer becomes popular with the public, and the business grows, then another greedy business makes the owners an offer to sell the business, and often the takeover is successful, then as soon as the new management own the business they jack up all the prices to be more in-line with the rest of the rip-off market.
     It seems that everyone’s after all your money, and don’t care.
     Another new Insurance venture, is the life insurance, where the policies have been engineered so a successful large claim is extremely unlikely, so the premiums are pure profit for already greedy nad cashed up insurance industry.
     No such thing as a far go in Australia.

6. Viveka Weiley
   Posted 29/11/2011 at 3:02 pm | Permalink | Reply

   That’s all very well in a market with competition. When you have monopolies the market fails, to the tune of about a 25% markup over the odds apparently. And we do have monopolies on content; that’s what copyright is. Copyright is necessary to regulate the content industry, but because it’s a State-created monopoly it creates distortions in the market which need to be corrected by the State.

   To be specific here: Apple has exclusive rights to sell access to various movies, music etc – this is what the Minister is talking about. There’s nothing about hardware in the quote above – we’re talking about media content. Apple sells media content at a higher price in Australia than they do in the US. There is no supply-side cost justification for this: these are all bits, it costs Apple the same amount to serve a Megabyte to a customer in the US as it does to serve that same Megabyte to a customer in Australia. They can charge more because we have less competition here; in the US there are other players, streaming video and music services like Hulu, Sonos, Spotify… but they do not operate here, because the monopoly rightsholders won’t grant them licenses to do so.

   The only competition for the content monopolies in Australia is piracy. And of course, this is thriving. Often the content monopolies haven’t done a deal with *any* access provider operating in Australia, so a lot of content is not legally available here at all.

   But the Minister would probably like it if there were less piracy, and more legal access to content. Come on, this is fair enough.

   His solution is wrong though. The answer is not for Big Daddy Apple to lower its prices below the monopoly rents it can now charge, out of the goodness of its heart. The answer is copyright reform, especially mandatory content licenses, which is how radio currently works. If someone won’t do a deal to license their content to multiple access providers at fair and reasonable terms, then the government should step in and set the royalty, allowing anyone to set up as an access provider and provide anything. Sound radical? It’s really not; it’s how radio works right now. There are parasitic collection societies in the middle with radio that could be disintermediated with a ten-line perl script and a swift kick in the pants, but it’s the same regulatory model, and it works fine.

   • Bevan
     Posted 01/04/2012 at 11:36 pm | Permalink | Reply

     To get “REVENGE” on the greedy idiots hiding behind copyright and over charging for content, there are plenty of pirate download sites that cannot be shut down, and an endless assault on anti- copyright security software, illegal or not. Most people are resorting to this as the cost of living are increase, and the prices charged are just too high. So this has the effect of either prices are dropped to be competitive and reasonable or the content will be stolen. All the laws and security efforts is not going to stop it.
     I’ve been finding all the security features etc are becoming annoying and an inconvenience to the honest people forcing them to download the free pirate versions as there is no security. crazy. An example of this is DVD movies that force you to go through menus and shorts before a movie will play, and it’s easier to rip the movie to HDD to bypass the silly copyright threat jail messages.

7. Dan
   Posted 24/03/2012 at 3:54 pm | Permalink | Reply

   Not talking about hardware here people but specifically music and movies/tv shows. Our US brethren are getting much better deals on Australian artists music than we are here and that is something that requires equitable correction. The balance should be made at least weekly and the conversion fixed until the next. We’re paying on a conversion made years ago when the AUD was well below parity. Someones pocketing some big bucks and it isn’t the artists or the content producers as far as I know. They gat there set per unit amount based on the USD amount.