The market will decide Australian IT prices: ACCC

The ACCC's hands are tied, but it has told the IT pricing inquiry that over time, market forces will resolve the issue of the high cost of IT products in Australia.
Written by Spandas Lui, Contributor

The Australian Competition and Consumer Commission (ACCC) has acknowledged that it has limited jurisdiction over the high price of local IT goods, but it believes that consumers have been doing enough to put adequate pressure on the market to eventually bring prices down.

Speaking at the IT pricing inquiry, ACCC executive general manager for enforcement and compliance Marcus Bezzi said that the consumer watchdog is aware of the price discrepancy of IT products between Australia and other countries. But unless IT vendors are engaging in anti-competitive behaviour or misrepresenting their prices, it's not within its purview.

Even if the price differences of IT goods may be detrimental to consumer welfare, there is not much that the ACCC can do if it does not violate the Australian Competition and Consumer Act.

"We are interested [in this issue], but it really depends whether there's a contravention of the law," Bezzi told the House Standing Committee on Infrastructure and Communications, which is presiding over the hearing.

One example used by the ACCC was a situation in which a Microsoft operating system may cost more to buy in Australia compared to the US; in this case, the ACCC's hands would be tied, since there are alternative operating systems, such as Apple's OS X and Linux, available to consumers.

The committee did raise concerns over IT vendors using various means to make Australian buyers pay more, such as geo-blocking to prevent consumers from buying goods for a cheaper price on an overseas website.

"We are aware savvy internet users — and we recognise that's not all consumers — do have available to them these days ways in which they can circumvent these mechanisms," Bezzi said. "These include IT-based means, such as VPNs, proxy servers, and redirected DNS, which can disguise their Australian location."

Mail-forwarding services are also being used by Australian buyers to order goods in the US at a lower cost and have them shipped to Australia.

The ACCC also noted that TV networks are fast-tracking overseas TV shows in a bid to curb rampant illegal downloading online. The ACCC wanted to highlight how consumer actions have already put some competitive tension in the market, which companies are responding to.

One committee member did question whether Australians should have to bypass these limitations in the first place, and whether it is fair that only those "savvy" internet users are able to take advantage of lower prices of goods overseas.

"If it becomes a big enough way in which consumers can circumvent limitations being imposed by the companies on their consumers then those methods can start to have an impact on sales, and we're aware it's already having an impact on the market," Bezzi said. "We are seeing signs — to some extent, at least — the market is dealing with some of these issues."

In other words, according to the ACCC, the market will sort itself out, even if the end result is sub-optimal.

"I'm not saying it's necessarily going to deal with the issues in a totally satisfactory way from the point of view of consumer welfare," Bezzi said. "Over time, we would hope that the market forces would operate to sort some of these issues out."

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