Inquiry will 'weigh on' vendors setting future pricing

Consumer watchdog Choice and ACCAN call for parliamentary committee to take a closer look at geoblocking

The scrutiny applied to Adobe, Apple and Microsoft at last week’s parliamentary inquiry in IT pricing in Australia was a small victory for consumers despite each vendor's response not “coming close to a justification for higher prices”, said Matt Levey, head of campaigns at Choice.

The IT pricing inquiry was established in May last year to examine if there was a pricing disparity between Australian pricing for hardware, and software and other digital goods and prices in the US, United Kingdom and the Asia-Pacific.

Levey believed that at some level, the “discomfort of being in the spotlight” – after months of stonewalling calls to appear before the inquiry – would weigh on the vendors when it came to future pricing decisions.

“It’s not a straight forward equation, one parliamentary inquiry is [not necessarily] going to lead in a drop in prices but you’d have to think at some point there they are looking at the potential for reputational damage,” said Levey.

Adobe, Apple and Microsoft were grilled at the inquiry last Friday, using a range of excuses for the massive price delta between their products in Australia and overseas.

Choice’s Levey feels there is a strong case for the parliamentary committee to take a closer look at geoblocking -- blocking users from accessing websites or online content based on their IP address.

Western Sydney Labor MP Ed Husic – a key player in the establishment of the inquiry – has previously indicated the committee would examine geoblocking.

Choice's Levey believed the committee should look at that [geoblocking] and whether there is anything that could be recommended for the government to take action.

"That's around if businesses choose to do business in the Australian market, what’s fair in terms of how they prevent [consumers] from accessing identical products at lower prices,” he said.

He said what the government needed to ask was whether it was “anti-competitive or a form of privatised protectionism that is out-dated in a digital marketplace”.

The Australian Communications Consumer Action Network has also weighed in on the debate, saying it would also like to “see action that protects consumers while also encouraging competition.

“So, if the government encourages the removal of geoblocking, we hope they also clarify how Australian’s can continue to be covered by product warranties while making an international purchase,” said Erin Turner, policy and campaigns officer at ACCAN.

Turner noted that in its final statement Adobe highlighted the contribution the IT sector makes to the Australian economy, noting that Adobe products allowed businesses to create products and pay taxes.

“What wasn’t discussed was the impact Adobe’s pricing has an Australian businesses,” said Turner.

“We shouldn’t underestimate the impact of high IT prices on small business, especially [those] in creative industries.

“These are companies that have to compete with other designers in America, Canada and India and their competitors have lower costs for essential Adobe products.”

Levey said a creative professional in Sydney paying $1200 more for software than someone doing the identical work in San Francisco, is starting on the back foot.

“There’s real impact here on business in Australia,” he said.

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