Australia subpoenas Microsoft, Apple to explain why products cost Aussies more

By on February 11, 2013, 4:00 PM

Australian parliamentary officials have launched a formal inquiry which aims to examine why many tech products cost Aussies up to 50 percent more than they do for American consumers. Reportedly, Microsoft, Apple and Adobe are among some of the companies who have been ordered to appear on March 22 in Canberra for questioning.

''I'm firmly of the view that the only way to get answers from some of major IT vendors is to compel them to appear,'' the Sydney Labor MP Ed Husic said, reaffirming parliament’s decision to subpoena American-based multi-nationals to answer for higher-priced goods.

Consumer group Choice claims that when compared to the U.S., Microsoft Office is 34 percent more expensive in Australia, on average. Additionally, Australians pay about 232 percent more for digitally-distributed PC games than Americans, 73 percent more for iTunes purchases and 41 percent more for most computer products.

Apple and Microsoft have reportedly already made submissions to the committee, outlining increased taxes, freight and foreign exchange rates as key reasons for higher prices.

In one clear-cut example of absurdly priced merchandise, Choice noted it would be more economical to employ someone for 46 hours at $21.30 per hour, provide them with round-trip airfare to the U.S. and have them purchase a particular Microsoft-made enterprise software package rather than buying it locally for $8,939 in Australia -- and then have them repeat the process once more. The India Times did not specify what this enterprise-level software package was, however.

"For some time consumers and businesses have been trying to work out why they are paying so much more, particularly for software, where if it's downloaded there is no shipping or handling, or much of a labor cost," Husic told Reuters.

The Register offered some less extraordinary examples though, like $119 AUS for Office 365 Home Premium versus $99 USD in the U.S. and $539 AUS for a 16GB iPad as opposed to $499 USD. The exchange rate of AUS to USD is currently 1 to 1.03, making the currencies relatively equal.




User Comments: 32

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1 person liked this | negroplasty negroplasty said:

Because they have to get them to the middle of nowhere... jeez. Oh, and can anyone say VAT?

dms96960 said:

Probably for the same reason kangaroo meat costs more in NYC than it does in Perth.

2 people like this | Darth Shiv Darth Shiv said:

Because they have to get them to the middle of nowhere... jeez. Oh, and can anyone say VAT?

They are talking not only about physically delivered goods but digitally. Something that costs US$50-60 on Steam is regularly "regionally priced" at AUD$80-100. The Australian dollar is WORTH MORE than the USD. Australia has no VAT. It has GST which is 10%.

Where is the difference going? I'll tell you exactly where it is going... into fatcat pockets. There is absolutely no reason. We can purchase physical goods from overseas for cheaper and because of this, physical retail stores are dying. They need to sort out Australian wholesale prices quickly.

Guest said:

They need to do it for the UK as well as we pay the same dollars to pounds which is a total rip off £400 is not $400 which these companies like microsoft, apple, amazon etc show I prefer to buy stuff and get it imported because its a LOT cheaper which is pathetic!

veLa veLa said:

I'll tell you the reason, greed

spydercanopus spydercanopus said:

Oz has taxes on ALL blank digital media, too. CDs, HDDs, etc... And there is no 'unlimited' bandwidth. Must really suck to live on an island of exiles.

Adhmuz Adhmuz, TechSpot Paladin, said:

Yeah, no worries, Canada is just north of the border eh but things cost more for us too. Fortunately digital distribution doesn't fall into that category but physical goods sure as hell do. And our currency has been on par if not above what the US dollar is worth. Theres always China who will beat any price and ship it for free anywhere in the world if your not happy buying from the States.

Darth Shiv Darth Shiv said:

And there is no 'unlimited' bandwidth.

Wrong.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

Commercial companies (particularly software companies) usually roll a set cost factor in for things like support and customer service. Outlying and harder-to-reach places usually get a higher factor figured in for that part of the pricing equation. Support is an issue, warranty shipping is an issue, etc. Have to wonder if they are considering Australia a difficult support scenario?

spydercanopus spydercanopus said:

Wrong.

It's what I've heard from my aussie friends. Is it just prohibitively expensive for unlimited?

hahahanoobs hahahanoobs said:

Yeah, no worries, Canada is just north of the border eh but things cost more for us too. Fortunately digital distribution doesn't fall into that category but physical goods sure as hell do.

Wrong. I live in SW Ontario and...

BF3 w/Premium is the same on Origin as it is at ebgames @ $59.99.

Crysis 3 Hunter Edition is also the same price @ $59.99

[link]

[link]

You would think the physical copy would cost more because of the packaging, shipping, the manual, the disc and the burning.

1 person liked this | St1ckM4n St1ckM4n said:

As someone who lives in Australia, this stuff drives me insane. This place is 20 years behind, it's not funny at all.

An explanation as to the priced on games (digital included) that I've heard: back when $1AUD = $0.50USD the prices for games were $100 in Aus and $50-60 in US. Now that everyone is used to paying such premiums, the prices have stayed regardless of the exchange rate.

It is such B.S. The Jeep car company (along with Chev, etc) didn't drop prices at all to match exchange rate. Neither did petrol companies. Everything just goes up.

As for the internet bandwidth - true unlimited does exist, but it is in short supply, expensive, business only at times, and limited to metro only. Oh, if you live in a non-capital city, that's $10/mth extra on your Internet bill, thanks.

Adhmuz Adhmuz, TechSpot Paladin, said:

Wrong. I live in SW Ontario and...

BF3 w/Premium is the same on Origin as it is at ebgames @ $59.99.

You would almost think the physical copy would cost more because of the packaging, shipping, the manual, the disc and the burning.

Should of specified as none tech goods, most electronics are actually not that far off the price in the States. Games are forced to be the same price both physical and digital if not the retail stores would just stop selling games. Where would be the incentive to go out to ebgames and paid $5 or $10 more just for a box, it's almost like the way console games are usually around $60 vs pc games are $50. And yes you would think there would be a price difference because physical material cost money vs bandwidth which is practically free. A better way to look at it is why do we not get a discount for NOT getting the box with all its contents.

Sniped_Ash said:

Things cost as much as they do because that's how much people will pay for them. I'm pretty sure that Steam games cost way less in Russia because that's the price point where buying becomes preferable to pirating.

So Australia's answer is obviously piracy. Hit up those iPad shipments coming out of China too!

Guest said:

I am also an angry Australian customer. I goto steam and the brand new game says $50 to buy. I goto buy it, steam detects I'm from Australia. The same game is now $90. 1 usd = 1 aussie dollar aprox. I than goto another website and buy it for 40 usd and play the game for more than half aussie retail price. It's cheaper for me to buy it from the uk have it express shipped to my door and usually pay half the price of retail particularly for console games.

Darth Shiv Darth Shiv said:

It's what I've heard from my aussie friends. Is it just prohibitively expensive for unlimited?

I pay AUD$50 a month for unlimited albeit on ADSL2+. About 8-10mbit/s. I might add that is on a Telstra DSLAM service (I.e. the most expensive provider). If I lived elsewhere I'd be able to get it cheaper.

Darth Shiv Darth Shiv said:

Things cost as much as they do because that's how much people will pay for them. I'm pretty sure that Steam games cost way less in Russia because that's the price point where buying becomes preferable to pirating.

So Australia's answer is obviously piracy. Hit up those iPad shipments coming out of China too!

It's pretty simple... we can use drop shipping from other countries and overseas proxies for physical and digital purchases respectively. I really don't care if retail dies here because if they are price gouging, I'm not going to support the local market.

LNCPapa LNCPapa said:

It's because they are still going by the 2008-2009 exchange rate and don't want to hastily change it in case the US dollar gets stronger again. Also, the Canadian dollar is often right around the US dollar in value but only rarely higher in value - since 2008-2009 also when the US dollar was very strong.

1 person liked this | fullmetalvegan fullmetalvegan said:

Because they have to get them to the middle of nowhere... jeez. Oh, and can anyone say VAT?

That's completely incorrect, it's cheaper for me to order a product from the USA/Korea and have it shipped to me - than to actually go into a store and buy it. I can save hundreds of dollars by simply ordering it myself from a non-Australian distributor. So you're telling me that Apple has to pay an extra $200 for shipping per item, but a regular customer can have it shipped for $30? There's also an incredible amount of shipping costs involved in sending me a digital download too, I can see why that's costing me $50 more too. Uh huh... -_-"

Guest said:

How is this "they"?

Government?

Rasta211 said:

Sorry to hear Australians are getting price gouged. I hope you guys get the answers your looking for.

Chaosbird Chaosbird said:

So, Australians pay 119 AUS? Guess what, in Denmark Office 365 Home Premium costs 800 kr., thats roughly 143 USD :). Don't even wanna know what an iPad at 500 USD would cost us, but probably something like 650-800 USD.

LukeDJ LukeDJ said:

This is truly a major problem. Whenever companies are asked about why the prices are so ridiculous, they just throw out the same lame excuses. Shipping costs, exchange rate, all B.S.

The fact that it is cheaper for me to buy a game from the UK and have it shipped over than it is for me to go down to my local game dealer (or get it off steam, in the case of new games) is just plain wrong.

Skidmarksdeluxe Skidmarksdeluxe said:

Yeah it's a sad state of affairs for us all in the southern hemisphere and no matter what BS reason is given for high prices, the bottom line is greed. Look on the bright side, southern hemisphere weather is a lot better than the northern hemisphere and they can't take that away from us.

Nic Nic, TechSpot Paladin, said:

The price is whatever the market will bear ... thats capitalism ... if people stop buying the products, then the cost will come down to encourage sales.

Guest said:

Oz has taxes on ALL blank digital media, too. CDs, HDDs, etc... And there is no 'unlimited' bandwidth. Must really suck to live on an island of exiles.

As opposed to living in a country run by religious nut jobs who don't trust their government enough to actually implement proper gun control. Yeah it really sucks to live in Australia.

PinothyJ said:

Oz has taxes on ALL blank digital media, too. CDs, HDDs, etc... And there is no 'unlimited' bandwidth. Must really suck to live on an island of exiles.

Last year, Forbes listed Australia as the Wealthiest country (or second Wealthiest depending on the graphs as they had a few) so it must really suck to be living in Australia. Especially when they have a government subpoenaing corporate giants in an attempt to give its citizens a 'fair go' -- it must be a really horrible place to live.

How is life where you live...

St1ckM4n St1ckM4n said:

Last year, Forbes listed Australia as the Wealthiest country (or second Wealthiest depending on the graphs as they had a few) so it must really suck to be living in Australia. Especially when they have a government subpoenaing corporate giants in an attempt to give its citizens a 'fair go' -- it must be a really horrible place to live.

How is life where you live...

Various statistics gathered to make a generalised assumption are pretty much that. Actually living here is a completely different story.

1 person liked this | Darth Shiv Darth Shiv said:

Last year, Forbes listed Australia as the Wealthiest country (or second Wealthiest depending on the graphs as they had a few) so it must really suck to be living in Australia. Especially when they have a government subpoenaing corporate giants in an attempt to give its citizens a 'fair go' -- it must be a really horrible place to live.

How is life where you live...

Not complaining about life but am complaining about overseas companies charging a higher wholesale price for our country. We'll just bypass the local wholesale.

Wealth, well we have good social welfare and high income tax rates compared to the states so it is easier for non-wealthy people to become wealthy. Personally I'm happy to pay taxes for people to have educational opportunity and not be desperate for basics like food, decent homes and sending their kids to tertiary education. It costs very little up-front money to send a child to tertiary education here.

PinothyJ said:

Various statistics gathered to make a generalised assumption are pretty much that. Actually living here is a completely different story.

Australia is a great place to live...

Guest said:

ADHMUZ wrote "Yeah, no worries, Canada is just north of the border eh but things cost more for us too. Fortunately digital distribution doesn't fall into that category but physical goods sure as hell do. And our currency has been on par if not above what the US dollar is worth. Theres always China who will beat any price and ship it for free anywhere in the world if your not happy buying from the States."

Oh spare me, it's not even close to what the UK and Australia have to endure and I should know, I live in Canada.

Guest said:

It's actually great living in the best country on Earth.Unfortunately we get screwed big time when it comes to digital material.

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