IT Price Inquiry: Tech Prices To Fall?

Written by Oonagh Reidy     26/03/2013 | 15:38 | Category: HOME OFFICE

After the Inquiry...comes the price drop?

IT Price Inquiry: Tech Prices To Fall?
Will these pricetags be less after the Inquiry?
As the furore aorund  IT pricing inquiry dies down, will Aussie tech pricing come down anytime soon?

"We hope so" says consumer watchdog Choice's Head of Campaigns, Matt Levey, who has campaigned tirelessly against tech giants like Apple, Adobe and Microsoft who charge up to 70% more for identical products, like iTunes, Microsoft software and Apple hardware, branded the "Australia tax". 

Tech giants Apple, Adobe and Microsoft were summoned to speak before the IT pricing inquiry on Friday to explain to the parliamentary committee why price of tech goods are far higher here than abroad.

A public form like this is bound to put pressure on the companies to lower their prices, Levey told Channel News.

"These are public companies ...they must be sensitive to public opinion."

And while the watchdog isn't calling for direct government intervention on the regulation of technology pricing on items like iPhones, tablets and sottware downloads, "we'd like possible action on geo-blocking," he said. 

Major global companies including Apple, Microsoft and others engage in farcical practices like geo-blocking, which Choice says should be examined by the government, and may be anti-competitive as well as a trade barrier.

Geo blocking occurs where Aussies are prevented from buying goods cheaper on US websites via online technology.

Tech companies may argue it provides a specialised, localised product, but "give Australians the choice" to select either and allow them save up to $1200, if they don't want the 'customized' product, says Levey.

Since the dawning of the virtual retail world, despite being on the other side of the world, Aussie consumers can now check the prices of goods like iTunes, iPhones and Microsoft Office in other countries.  

Read:  Apple: We're No 'Price Gougers'

Although they may not be able to purchase the cheaper goods on the websites as companies have very clever technology that recognise international IP addresses, consumers can see how they are being ripped off by one click of a button.

A quick looks at Apple US Store on Friday, shows we pay $150 more for iPhone 5 and on iTunes US, The Strokes new album 'Comedown Machine' costs $7 more, and almost $0.90 more per song down under.

And that just the tip of the iceberg.

Research by consumer watchdog Choice found the price disparity with one Microsoft software development product so high that, you could fly to Los Angeles return to buy the software and "still save thousands of dollars."  Ouch.

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A spokesperson for Nick Champion MP, who is Chair of the Inquiry, being conducted by the House of Representatives Infrastructure and Communications Committee, said it is "far from over" and other tech companies will be called before it, although did not name any specific organisation.

The Inquiry is finding more and more disrepancies between AU prices and overseas as it continues its investigations, he said, and expressed doubt over some of the tech giants reasoning behind the giant price discrepancies, as did the Committee members in Canberra.

It is likely the Committee, will issue a report and recommendations once the Inquiry is complete although it won't have any formal weight.

"Consumers should be the No. 1 priority" says Leavy.

Choice, too,  rubbished all of Apple, Microsoft pathetic excuses for price rorts in Oz, including higher labour, freights and taxation  costs: ('can a 50% difference in prices really be explained by a 10% tax?").

Apple "came very prepared [to IT price Inquiry] to blame some one else", Adobe were "evasive" while Microsoft were "very blunt - if you don't like it go elsewhere".

There is "no justification for it, we need action" in particular on geo-blocking practices, says Levey.