No revelations in IT pricing inquiry hearing

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CNET Editor

Michelle Starr is the tiger force at the core of all things. She also writes about cool stuff and apps as CNET Australia's Crave editor. But mostly the tiger force thing.

The first public IT pricing inquiry hearing was held yesterday in Sydney.

(2010_1310 - Coins_3 image by Ben Hosking, CC BY 2.0)

The Australian Information Industry Association (AIIA) presented in the morning, but the information it imparted revealed nothing that we hadn't heard already.

In its written submission to the inquiry (PDF), the AIIA outlined several possible areas in which the cost of doing business in Australia might be higher.

It expanded on its claims yesterday morning, stating that rent, wages and warranties cost more in Australia.

Suzanne Campbell, CEO of the AIIA, said, "One of our members said [Australia's] consumer warranty landscape is the most expensive in the world," reported ZDNet Australia. "A life cycle of a product could be three years, and that makes provisioning of warranty of those products very expensive in this market."

But consumer organisation Choice refuted that claim later in the afternoon.

Choice head of campaigns, Matthew Levey, said, "We fail to see evidence of how offering warranty in the Australian market under the ACL [Australian Consumer Law] could be that much more expensive than offering that requirement under the US legislation. We understand that it's part of doing business, and there may be some jurisdictions out there that don't have sophisticated consumer legislation ... but we don't believe the difference between Australia and the US market would justify that."

He explained that Choice believes the price disparity is caused by suppliers and wholesalers artificially setting higher prices at the outset.

"We think the most obvious reason and likely reason in fact for these price differences is international price discrimination, so that's actually the practice of the international businesses who manufacture these products who own the copyright actually charging more in the Australian market," he said, according to the ABC.

Meanwhile, Apple and Microsoft were conspicuously absent — Microsoft provided a public submission (PDF) that cited labour, regulation, marketing and supply chain costs.

Apple, on the other hand, had a private hearing with the committee last week, following a request that its submission be kept private. According to The Australian Financial Review, it laid the blame for higher prices in iTunes on Australian taxes, warranties and copyright holders.

Adobe, which was slammed last week by Labor backbencher Ed Husic for not making a submission to the inquiry, attended but did not speak. It finally made a submission Friday, 27 July (PDF) saying that it did not make an individual submission because it contributed to the AIIA submission.

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PhilipCE posted a comment   

The microsoft Home User Programme
lists office professional as $15.00. Microsoft lists the rrp as $789. How is there $774 difference? posted a comment   

Microsoft can write all the letters they want, they DO set the final "to-the-customer" price despite what was said in the PDF that Michelle linked. They sell product through the global Microsoft Store, including MS Office, Windows 7, Windows 7 variants and Windows 8 variants.

As of the end of June, The digital edition of Windows Anytime Upgrade costs twice as much for Australian users than US users, evident with simply just changing the Windows Region setting. Yet Windows 8 has standard global pricing although this is a promotional launch price.

The CNET team discussed price gouging in general in their 5th July podcast

A report on the Windows 7/8 situation specifically is on my website for those interested about the product issues specifically rather than the Husic Inquiry/Politics.

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