I was pretty excited when I heard about the Australian government's inquiry into price discrepancies between what Australians are charged for tech versus what the rest of the world pays for the same products. Unfortunately, since then, I've been fed a dose of reality.
Analysts aren't full of optimism that it will have any effect, or that the government really has enough power to do anything about the issue. In addition, Gartner analyst Brian Prentice thinks that we're barking up the wrong tree.
He says that instead of asking why we pay more, we should be asking why we are stopped from shopping in any market we choose, so that we're forced to stay in our little walled-off island retail mall.
"I don't really care whether my apps, songs, video games and ebooks carry a steep premium here in Australia. Apple, Microsoft and all the others can charge whatever they want," he said in a blog post.
"What I care about is why I'm prohibited from shopping outside Australia to get a better price. Shopping for digital products is like being asked for your ID before you enter a department store, and if you don't live in the right location, you're barred entry. Or they'll let you in to browse all the great prices, but your credit card will be declined at checkout."
And, of course, he's exactly right. We should be allowed to choose where we shop. If we don't want the extra service or warranty that buying a product in Australia provides, then we should be able to purchase goods from another market. I mean, after all, Google Australia's local advertising revenue is reportedly billed through Ireland to enjoy that country's low tax rate, so vendors are obviously playing the global card. Why shouldn't their customers be able to do the same thing when buying products?
Prentice pointed out that there are many tricksy things that vendors do to keep Australians buying at Australian prices, such as not allowing credit cards with non-US mailing addresses to be used to buy products on US sites. These things could be blown out of the water via trade agreements.
Unfortunately, Prentice doesn't think that the idea of area-based purchase restriction will be tackled in the terms of agreement for the inquiry, because he doesn't think that the government wants to touch the political mess that makes up trade-agreement reasoning. To prove his point, he highlighted the government's inaction on the higher prices of books in Australia by continuing to disallow parallel importing.
Of course, books are content, which has long been a major thorn in the side of equal global distribution of products. Since content rights are signed over in an area-based fashion, the timing and pricing of the content involved is completely different in Australia than it is in the US. Hence the prevalence of piracy.
I agree with Prentice that the issue is a morass that goes far beyond the pricing of IT products here, and one likely to be skirted by the government in a side-shuffling motion. Instead, we'll focus on marketing and support costs in Australia versus overseas, with the vendors banging on about why they really do need to charge us that much.
Let's just call the whole thing off, shall we?
Is Prentice being too cynical? Will we see results? Or is the price inquiry just a massive waste of time?