Time to tackle tech's price gougers in New Zealand

Australia has looked at the issue of overcharging from tech vendors, and so should New Zealand.
Written by Darren Greenwood, Contributor

Last weekend, I stayed at an island over four hours by ferry from Auckland. Petrol was more than NZ$3 per litre at one of the two gas stations I saw, and in the handful of little shops, food certainly cost far more than it does in the supermarkets back in Auckland.

But were the retailers ripping off Great Barrier's 700 or so residents, as shopping around is somewhat difficult for them, or did their prices actually reflect the cost of bringing those supplies to the island?

This is mirrored in the debate that has been reignited over the price gouging of digital products in New Zealand by international software and hardware companies.

The Green Party has carried out a survey of 100 hardware and software products, and found that prices here are typically 40 percent higher than in the United States.

The party is demanding an inquiry by parliament's commerce committee into the pricing gap, similar to the one recently carried out in Australia.

The Australian inquiry last month found evidence that Australians are commonly paying more than 50 percent more than Americans for digital goods such as software, music, and computer games bought online.

Australia's government decided that software overcoming "geo-blocking" would be legal, and that it may even outlaw geo-blocking to prevent firms from over-charging Australian customers.

The New Zealand government, however, has yet to act. Preferring to work with Australian regulators over the issue, any action can wait until after Australia's federal election, although New Zealand's ICT Minister Amy Adams has said that such pricing of hardware and software is an issue.

Of course, there are ways to overcome rip-off retailers, and it is ironic, if not farcical, that the sector that has turned the world into one big global shopping bazaar is persisting with such blatant discriminatory practices that their own technologies can be used to overcome.

Tech has created eBay, tech has created TradeMe, and tech allows us to buy directly from US and UK department stores, creating that related issue of GST on overseas purchases.

It is certainly right that the government should look into the issue, as it is sure that discrimination is taking place and some of it is unfair. As the Greens say, it harms our consumers and our businesses.

Yes, the size of our markets, the lack of intense competition plays a role in our higher prices. But we are talking technology here, often lightweight products that shouldn't cost the earth to ship. Indeed, some of them can even be downloaded over the internet.

How HP can justify charging more than double in New Zealand for a certain laptop is beyond any rational explanation.

Of course, retailers have the right to charge what they want, but we as consumers can only decide not to pay such exorbitant prices.

As a major buyer of Microsoft, the government and business sectors could decide that it will use other software. The Australian government was able to plow money saved from not renewing Microsoft contracts into its other initiatives.

The government here could also do more to name and shame the most persistent and guilty of offenders and compliment the Greens for their efforts.

With budgets always constrained, the country's IT managers and CIOs could also put more pressure on the tech companies and the prices charged to the "channel".

Being able to overcome geo-blocking looks like a great project, too.

This is an issue for both countries to work together on, involving government and consumer, business and household. By acting together, a combined market of nearly 30 million people should certainly succeed in stamping out many of the abuses being committed by the tech giants.

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