Parliamentary committee prescribes more education, competition to cut IT prices

Committee finds Australians charged 50 per cent more than other countries
Adobe was one of the IT vendors probed in the pricing inquiry.

Adobe was one of the IT vendors probed in the pricing inquiry.

The parliamentary committee analysing why prices for IT goods are higher in Australia than other countries has chosen not to rein in the vendors that set the prices.

In a report tabled on Friday, concluding a 12-month inquiry, the committee instead recommended greater consumer education and law changes aimed at increasing competition and protecting vulnerable social groups.

“The committee found that big IT companies and copyright holders charge Australians, on average, an extra 50 per cent, a practice consumers call the ‘Australia Tax,’” said Committee chair Nick Champion.

“High IT prices can have significant impacts given the critical role IT plays in many areas of Australian life.”

However, the committee chose not to take any actions to directly regulate the prices charged by IT vendors.

“While companies should remain free to set their own prices, the committee took the view that there are a number of ways in which Australia can act to increase competition in IT markets, which should reduce prices over time,” Champion said.

Those methods include a consumer education campaign to help consumers find cheaper goods online, changes to the Copyright Act and the Competition and Consumer Act, and action to reduce the impact of high prices on vulnerable social groups including the disabled, students and low-income Australians.

In the report, Champion said the committee rejected IT vendors’ arguments that it costs more to do business in Australia.

“Particularly when it comes to digitally delivered content, the Committee concluded that many IT products are more expensive in Australia because of regional pricing strategies implemented by major vendors and copyright holders,” the committee said.

The committee recommended an assortment of changes to copyright and competition law meant over time to reduce prices and curb geoblocking—blocking users from accessing websites or online content based on their IP address.

Among the recommendations, the committee proposed lifting parallel importation restrictions in the 1968 Copyright Act and reviewing parallel importation defence in the 1995 Trade Marks Act. Also, the committee recommended a change to the Copyright Act to clarify and secure consumers’ rights to circumvent technological protection measures that control geographic market segmentation.

Consumer advocacy group Choice has said previously that while the inquiry may not lower directly lower prices, the IT vendors in the probe could suffer reputational damage.

During the inquiry, vendors Adobe, Microsoft and Apple all defended their higher prices in Australia.

Adobe told the committee that Australians can fly to the US if they want lower American prices on boxed Adobe products, or instead buy the company’s subscription-based offering. The vendor has since announced a move to selling only the subscription version.

In other hearings, Apple blamed higher prices of digital music on the rates that Apple must pay to the record labels. Microsoft said it charged 70 per cent more in Australia because of labour and rental costs, compliance with local laws, customer perception and increased competition.

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