news Consumer group Choice has called for the Federal Parliament to use its powers of subpoena to force recalcitrant IT vendors such as Apple, Adobe and Microsoft to give evidence about their price setting practices in Australia, due to the vendors’ reluctance to voluntarily appear before a committee into Australian IT price hikes.
In May, following a public campaign on the issue by Labor backbencher Ed Husic, the House of Representatives Standing Committee on Infrastructure and Communications called for submissions to help inform an inquiry into pricing of technology goods and services in Australia, publishing the terms of reference for the initiative on its web site. The results have so far demonstrated a strong groundswell of public anger about ongoing markups on technology goods sold in Australia.
Many of the submissions from users focused on the fact that online stores such as Apple’s iTunes, Valve’s Steam, Microsoft’s Xbox Live, Sony’s PlayStation Network, Amazon’s Kindle store and Adobe’s software store charged Australians higher prices for the exact same software and content than residents of other countries, particularly countries such as the US. Companies such as Microsoft have previously justified the charges based on the increased cost of doing business in Australia.
However, not all companies whose products have been mentioned by the inquiry have volunteered to attend to give evidence. US software giant Adobe, for example, declined to appear to give evidence to the inquiry, although it participated in a submission by the Australian Information Industry Association. Adobe has a practice of commonly marking up software products for the Australian market such as its popular image editing application Photoshop — despite the fact that the software is often downloaded from the same site in Australia and the US.
The reluctance of major vendors to appear in front of the inquiry has resulted in public displays of anger by members of the committee. In September, for example, Husic publicly raised the prospect of compelling recalcitrant technology vendors to appear before a parliamentary committee on IT price hikes in Australia, alleging that some suppliers are “treating the Parliament with contempt”.
In a statement released overnight, consumer group Choice called on the committee investigating the issue to “make international tech giants front up and explain the high prices paid by Australians”.
Choice said it had been six months since the inquiry began, and the continued “stonewalling” from Apple, Adobe and Microsoft was a snub to millions of Australians who paid higher prices for their digital products.
“Choice has provided evidence showing Australians pay around 50 per cent more than US consumers for identical music, software, games and hardware,” said Matt Levey, Choice head of campaigns. “With the industry unwilling to volunteer any detailed or public response, it’s time for the Committee to use the full powers of the Parliament and compel these businesses to front up and explain why they think it’s alright for Australians to pay higher prices.”
Choice said it welcomed the Committee’s attempts to shine a light on IT price discrimination, but the must go beyond rehearsing a list of rip-offs and create real pressure for lower prices.
“Just last week, AC/DC finally hit iTunes with a 54% difference, that’s $80 difference, between the local and US prices for the ‘complete collection’,” said Levey. “Unfortunately for those about to rock, this is far from an isolated example, and it is one reason why some music fans have taken to setting up US iTunes accounts to access legitimate, cheaper music.”
He added: “We are calling on the Government to investigate whether measures used to sustain international price discrimination, like geo-blocking, are anti-competitive, and an important step towards that is for this inquiry to call the industry’s bluff on their pricing excuses.”
Choice’s comments on the issue come a month after both sides of politics — Labor and the Coalition — blasted the IT vendors who were reluctant to appear before the commitee.
Committee chair Nick Champion told the House of Representatives that to date the committee had received “only qualified and sporadic cooperation from industry groups and major IT companies” during the proceedings. In general, Champion said, “to one degree or another, there has been a real unwillingness to submit evidence in public or to appear before the committee on the part of both industry associations and major companies in the area of IT”.
Nationals MP and deputy chair Paul Neville agreed with Champion, in a rare show of unity between the major sides of politics.
“I rise to support the chair of the committee as his deputy,” Neville told the chamber. “It is obvious from the evidence we received from members of the public and people on the consumer side of this agenda that the public has had enough of this pricing, which puts Australia at a disadvantage in a whole range of areas, such as IT hardware and software and things that spin off them—music downloads and engineering, medical and educational software.”
I agree wholeheartedly with Choice. It is time for the Parliament to compel these vendors to come forward. As I wrote in late October:
“I’ve enjoyed a long-running relationship with the local offices of major technology vendors such as Microsoft, Adobe and Apple for the better part of a decade now. Good people work at these companies, and I admire much of the work they do. Certainly I continue to use and write about their products almost every day. I simply could not do the work I do without Microsoft Office and Windows 7, Apple’s Mac and iPad products, and Adobe’s Creative Suite.
So it is with respect, and conscious of that long relationship, that I say, enough is enough. These companies are treating the Australian consumer and the Australian Parliament with contempt right now on this issue, and need to pull their head in. Strength and pride can be virtues at times, but so can humility, and right now a little humility is needed from these companies, before both sides of Federal politics decide that they are tired of being treated like they don’t have any authority and start making the vendors’ lives very, very difficult indeed.”