news The Federal Parliament’s inquiry into local price markups on technology goods and services has gotten under way, with the committee overseeing the initiative issuing its terms of reference and calling for submissions from the general public on the issue.
In late April, Communications Minister Stephen Conroy confirmed the Government would hold an official parliamentary inquiry into the issue of technology companies marking up goods and services for Australia, following a long-running campaign by Federal Labor MP Ed Husic. Husic has been raising the issue in Parliament and publicly since the beginning of 2011 (he was elected in the 2010 Federal Election), in an attempt to get answers from technology giants such as Adobe, Microsoft, Apple and others as to why they felt it was appropriate to price products significantly higher in Australia (even after taking into consideration factors such as exchange rates and shipping) than the United States.
Earlier this month, for example, global software giant Adobe continued a long-running tradition of extensively marking up its prices for the Australian market, revealing that locals would pay up to $1,400 more for the exact same software when they buy the new version 6 of its Creative Suite platform compared to residents of the United States.
In a statement issued this morning, the House of Representatives Standing Committee on Infrastructure and Communications officially confirmed it would conduct an inquiry into the price differentiation of IT software and hardware in Australia compared to overseas markets.
The Chair of the Committee, Nick Champion, said “Australians are often forced to pay more for IT hardware and software than consumers in overseas markets. The Committee’s inquiry aims to determine the extent of these IT price differences and examine the possibility of limiting their impact on Australian consumers, businesses and governments. The Committee will look into the cost of computer hardware and software, including games, downloaded music, e-books, and professional software, to name a few. The Committee is looking forward to hearing from the companies who set these prices and the consumers and businesses that purchase their products.”
The terms of reference for the inquiry, which will take public submissions until 6 July, state that it will examine:
- Whether a difference in prices exists between IT hardware and software products, including computer games and consoles, e-books and music and videos sold in Australia over the internet of in retail outlets as compared to markets in the US, UK and economics in the Asia-Pacific;
- What those differences are;
- Why those differences exist;
- What the impacts of these differences might be on Australian businesses, governments and households; and
- What actions might be taken to help address any differences that operate to the disadvantage to Australian consumers.
The committee consists of Champion, Husic, deputy chair and National MP Paul Neville, Liberal MP and former Optus executive Paul Fletcher, Labor MPs Stephen Jones and Mike Symon, independent Rob Oakeshott and Liberal MP Jane Prentice. In the past Shadow Communications Minister Malcolm Turnbull has also sat on the committee as a supplementary member for a matter related to telecommunications.
In a separate statement issued this morning, Husic said: “For too long, businesses and consumers have asked: why does it sometimes cost up to 80 per cent more to simply download software in Australia compared to overseas. The problem’s been IT vendors have seemed unwilling to explain why software and hardware costs more in Australia,” he added. “This Inquiry gives an opportunity for businesses and consumers to have their say on IT prices. But it also gives IT firms a chance to educate the public on the factors they take into account when shaping their pricing approach.”
Husic welcomed the breadth of the inquiry’s Terms of Reference. “This inquiry will look into the impact on a wide range of consumers – examining the cost of IT systems for business through to the cost of music and game downloads,” he said. “This just reflects the simple fact that with technology weaving its way into our lives in so many ways, people from all walks of life should have their say on this issue. I particularly hope that small businesses and young people take the chance to make a submission and have their concerns heard.”
After the inquiry was announced, Delimiter invited global vendors Adobe, Microsoft, Apple, Lenovo and Amazon, which are some of the most visible companies selling high-profile technology goods and services to Australians, whether they would commit to attending the parliamentary inquiry if invited, and whether they had any other statement to make on the matter.
Adobe said it would cooperate with the inquiry, and Microsoft said it would review the terms of reference. However, the other companies did not respond to requests for comment on the matter.
As Australia’s technology sector and — for want of a better, less hyped word — “digital economy” gradually expands, the issue of local price mark-ups is only going to grow in importance and prevalence in the debate about the nation’s innovative future. It will be fascinating to see what comes out of this inquiry, and I am sure it will be closely followed by Australia’s technology press on a blow by blow basis. There is the chance to enact some significant change here, and I encourage all those interested to make a submission to the review.