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Australia to question Microsoft, Apple, others in 'price gouging' probe

Australia's parliament will hold an inquiry to determine why major digital content providers are charging significantly more for content than elsewhere in the world.
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Written by Zack Whittaker, Contributor on

If you thought London was expensive compared to New York or San Francisco, spare a moment's thought for our Australian counterparts.

Apple, Microsoft, and others will soon face questions in the Australian Parliament over why their products and services cost significantly more than other regions --- known as 'price gouging' --- particularly in digital markets such as Apple's iTunes and e-book stores.

Australia's Communications Minister, Stephen Conroy, ordered the inquiry which could lead to a massive drop in prices across the country.

The companies may be asked how they price their applications and downloads, and justify why the increase in cost.

But could it simply be because, "it's Australia?"

In 2011, Apple lowered the price of iPhone and iPad applications by up to 25 percent after Ed Husic MP criticised Apple in parliament for its unfair prices, despite reportedly being a fan of the company's products.

But hardware prices remain higher than that of the U.S. market.

Conroy recently wrote in a letter to Husic: "There is evidence to suggest that the innovative use of technology is not always matched with innovative new business models in the case of products and services distributed online," reports the Sydney Morning Herald.

The issue reared its ugly head once again with the release of Adobe's Photoshop CS6, after Australians found the price to be $1,400 more than for U.S. customers.

The e-book market may also be examined, particularly in light of the U.S. and European antitrust probe into Apple and five other publishers over the alleged fixing of e-book prices.

Australia's Competition and Consumer Commission recently asked local retailers and book sellers to submit complaints with the possibility of a third antitrust investigation, only weeks after it jabbed Apple for "misleading" consumers over the capability of its 4G-enabled iPad 3.

Consumer groups have continued to complain about the excessive pricing, citing Australia's tax system and its smaller market size, meaning technology companies' bump up the price of digital products in order to break even.

With 23 million citizens, Australia has a third of the UK's population. This causes headaches for companies like Microsoft and Apple who have to set up shop in the region at their own expense. Plus, Australia's tax system often means major companies have to pay more into the country which gets picked up in the price of goods by the end consumer.

The parliamentary inquiry will begin later this year.

Image source: CNET. Article source: Sydney Morning Herald.

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