Conroy's pricing inquiry a waste of time?

Conroy's pricing inquiry a waste of time?

Summary: 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.

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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?

Topics: Government, Government AU, Microsoft, Software Development

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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Talkback

5 comments
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  • This is pure political theatre by a government increasingly desperate to show they are thinking of the little man. A complete waste of time and money
    pml60aus
  • If prices for certain goods in Australia weren't so criminally high then we wouldn't have to shop overseas.

    Letting Australians shop overseas might seem like an easy fix but will ultimately be to the detriment of Australia because it's money thats not going to find its way back into the local economy.

    The best solution would be to get those certain companies that charge artificially high prices to play fair and price their products more fairly.

    In some cases companies are shooting themselves in the foot by charging ridiculously high prices.
    Take digital downloads for example, artificially high prices on digital downloads just make piracy seem like a more attractive alternative to paying absurdly high prices for something that should cost the same anywhere.
    By charging criminally high prices the companies are just doing more to promote piracy than they are to discourage it. If they charged fairer prices then a lot more people would buy their product legally ergo piracy wouldn't be as big a problem as it is now. By charging fairer prices they would also be helping to make the Internet a more secure place because a lot of places that people go to download illegal content can be incredibly dodgy and ridden with all sorts of malware and viruses.
    Jingles-8366c
  • Australia should be allowed NATO membership. NATO = No Action, Talk Only

    I do not believe any government want concrete actions for this issue. The more we pay, the more the government "collect" in taxes. (Sure, any big organization has a throng of financial lawyers and accountants who's main aim is to minimize tax paid to the Australian government.) Next these organization want our government to crack down on illegal software. I mean, one of the main reason why the illegal piracy of software are prevalent is due to the discrepancies in pricing.

    If MS, Apple or Adobe wants to stamp out illegal piracy, make their software affordable.
    anonymous
  • Why should the government enact laws to protect these cartels from software piracy if they are going to extort the Australian people. USD price for Adobe Photoshop 699, AUD price 1062. Pure and simple that is extortion. I am going to download it from a file sharing web site and get it for free, if it was 699 here I would pay 699, but im not going to let Adobe bend me over the proverbial barrel and pay over $300 more than a US customer. Dont **** foot around, remove their copyright protections of they are going to abuse them.
    anonymous
  • Set up a redirecting service and a credit card (Aussie sourced, but pointing to the redirector) and a proxy service. Costs a bit, but you'll make it back in one transaction.
    meski.oz@...