Apple, Microsoft and Adobe Required to Explain High Pricing in Australia

[MacRumors]

Apple is one of three high-profile companies being required to explain to an Australian government inquiry why its product pricing in Australia is significantly higher than in the United States, reports Kotaku Australia. The issue is not a new one for Australian officials, but legislators are stepping up their investigations into prices being paid by Australians.

The action comes after Apple, Microsoft and Adobe had all refused to send representatives to public hearings held by the IT Pricing Inquiry. The government has now issued summonses to all three companies, requiring them to attend and Parliament member Ed Husic warning that legal consequences will follow if they fail to comply.

These firms should have cooperated and been prepared to be more open and transparent about their pricing approaches. [...]

Adobe, Apple and Microsoft are just a few firms that have continually defied the public's call for answers and refused to appear before the IT Pricing Inquiry.

Apple's pricing does vary significantly by country, although comparisons often do not take into account taxes that are included in the base price in many countries but not in the United States. Different products also vary in their pricing comparisons across countries.

For example, the base 27-inch iMac is priced at $1799 in the United States, A$1999 (US$2054) in Australia and £1499 (US$2352) in the United Kingdom. But when subtracting included taxes from the international pricing, the iMac comes in at A$1817 (US$1867) in Australia and £1249 (US$1960) in the UK, for price premiums of 3.8% and 8.9% respectively.

For the 16 GB Wi-Fi iPad, the difference is even smaller once taxes have been accounted for, with the device priced at $499 in the United States, A$490 (US$503.38) in Australia and £332.50 (US$521.66) in the UK for price premiums of 0.9% in Australia and 4.5% in the UK.

iTunes Music Store pricing shows a much greater disparity for Australian customers, with tracks that sell for $1.29 in the United States being priced at $1.99 before tax in Australia.

Apple has traditionally priced its products somewhat higher internationally even when accounting for taxes, due in part to increased cost of business in many countries relative to the United States and as a buffer against fluctuating currencies. Customers and government officials in many of these countries feel, however, that pricing is still too high, particularly for digital content such as downloadable music and software that does not incur many of the overhead costs associated with physical goods.

The Australian Financial Review reports that Apple had testified in private on the matter, but had refused to do so at the public hearings. It cited IBRS analyst James Turner as commenting that this was part of Apple's long-established approach to secrecy:

It's a carry-over from the cult of personality that Steve Jobs built up around himself. People can call it arrogant, but that's only because Apple's way is different and they keep getting away with it. I also think that the refusal to engage will be what ultimately undermines Apple.

The public hearing is scheduled for March 22.

Article Link: Apple, Microsoft and Adobe Required to Explain High Pricing in Australia

[Number 41]

Look, Australia --

Just because you've figured out how to sell a steak for $9 at Outback doesn't give you the right to go telling other people how to price things.

[Spetsnazos]

The pricing in Aus is all over the place...could be gouging at this point...

[apple_iBoy]

If Australia doesn't like it, maybe Australia should develop it's own home-grown talent and compete.

Is this the same government that recently banned A-frame ladders? Now it has a panel that can require companies to show up to publicly defend their (arguably reasonable) pricing or face "legal consequences?"

This is not like gouging on gasoline or milk during a hurricane. This is an iMac.

[reallynotnick]

A 3.8% price premium is what they are complaining about? Do they forget to take into account their own taxes?

[Kebabselector]

The adobe tax in the uk does seem to be the worst of them at the moment. It'll be interesting to hear the answers from Australia

[MonkeySee....]

Originally Posted by apple_iBoy

If Australia doesn't like it, maybe Australia should develop it's own home-grown talent and compete.

The best bit about Apple at the moment is design and I think you have an Englishman to thank for that.

Bloody Americans

[camnchar]

That's how much it costs to ship products to the Edge of the Known Universe.

[WestonHarvey1]

Originally Posted by Number 41

Look, Australia --

Just because you've figured out how to sell a steak for $9 at Outback doesn't give you the right to go telling other people how to price things.

Outback isn't Australian. It's an "Australian themed" American restaurant chain.

[LostMyiPhone]

Let's imagine an Australia without any product from these 3 companies...

[keviig]

27" base iMac Norwegian price before taxes (25%): $2141...

[Number 41]

Originally Posted by WestonHarvey1

Outback isn't Australian. It's an "Australian themed" American restaurant chain.

Next thing you know, you'll be telling me that Australians don't sit around tossing boomerangs and playing didgeridoo music all day either.

[Brian Y]

As for the UK - 10% more is MORE than justified. It's much more expensive to do business here in the UK than the US.

Also, they need to account for worst-case scenario currency fluctuations - having prices go up and down based on current exchange rates would be impractical.

[basesloaded190]

Originally Posted by WestonHarvey1

Outback isn't Australian. It's an "Australian themed" American restaurant chain.

I think you missed the joke/sarcasm

[DeathChill]

Originally Posted by WestonHarvey1

Outback isn't Australian. It's an "Australian themed" American restaurant chain.

I'm pretty sure he was making a joke...

[TMar]

Originally Posted by WestonHarvey1

Outback isn't Australian. It's an "Australian themed" American restaurant chain.

I think the sarcasm was implied. Maybe you should look it up.

[mtneer]

This is ridiculous. Its not like we are talking about lifesaving drugs or anything essential. These are semi-luxury goods with plenty of alternatives that can perform the same functions.

[Sayer]

Doesn't Oz overprice so-called junk food so as to make it less available to the general public? I guess that's ok since no one wants to look at fatties, right?

And really Apple's prices show a measly 3.8% price hike after insanely high Aus taxes are removed. The UK is almost 9%, which should make the UK folks complain, yet they don't (unless its about an advertisement, go figure).

This hub bub makes me think maybe Aus doesn't want its public to realize how badly their own government is treating them via taxation policies. Dangit Apple, you are making the Aus government look bad, and you should feel bad!

[WestonHarvey1]

Originally Posted by TMar

I think the sarcasm was implied. Maybe you should look it up.

Read it again. No cues it was sarcastic. Sarcasm isn't always easy to convey in textual form - maybe you should look that up.

[Stella]

The Australian government have every right to try and protect their consumers against price gouging.

Other countries should do the same IMO.

Unsure why above comments think otherwise?

Originally Posted by camnchar

That's how much it costs to ship products to the Edge of the Known Universe.

Even digital delivered content?

[MonsterRain]

Originally Posted by keviig

27" base iMac Norwegian price before taxes (25%): $2141...

25% tax?

What. The. ****.

Glad I didn't take that job in Norway last summer. :/

[inlinevolvo]

Ridiculous. It's called a free market. We don't tell you how to price your fosters.

[ItWasNotMe]

Originally Posted by camnchar

That's how much it costs to ship products to the Edge of the Known Universe.

Shenzhen - Sydney = 4587 Miles
Shenzhen - Los Angeles = 6888 Miles

So further you ship the cheaper it is

[econgeek]

Originally Posted by apple_iBoy

Is this the same government that recently banned A-frame ladders? Now it has a panel that can require companies to show up to publicly defend their (arguably reasonable) pricing or face "legal consequences?"

That's government for you-- they're the mafia. "Youse got a mighty nice bizness here, be a real shame if something happened to it."

All government does is shake people down.

[aidler]

Base 27'' iMac comes with a price tag of 1,879.00 € in Germany. Thats 1,578.99 € before tax or 2,110.53 US$. A 17.3% premium and nobody is complaining.