At a parliamentary hearing in Australia this morning, representatives from Microsoft and Adobe struggled to justify the extraordinarily high prices they charge for popular software in the country, while an Apple spokesman blamed deals with rights holders for the high price of digital movies and music. The public hearing was called by the country’s Standing Committee on Infrastructure and Communications in response to allegations of price gouging by up to 70 percent or more compared to the same products sold in the United States.
"You'll charge as much as the market can bear."
According to the Sydney Morning Herald, Microsoft Australia managing director Pip Marlow disagreed with the premise, saying that strong competition means "customers will vote with their wallets" if the company sets its prices too high. Microsoft Office Professional sells for $399 US, but $599 in Australian currency — more than 55 percent more after adjusting for the exchange rate. The fact wasn’t lost on Labor MP Stephen Jones, who told Marlow, "you’ll charge as much as the market can bear."
Both representatives pointed toward more competitively-priced cloud offerings
Adobe Australia’s managing director Paul Robson found himself in a similar situation when called to explain why a copy of the company’s CS6 Design and Web Premium Suite costs nearly 75 percent more in Australia. The software's $3,175 Australian price tag led to widely-circulated reports that it is cheaper for Australians to fly to the US and buy it there. Both representatives tried to deflect criticism by pointing toward more competitively-priced cloud offerings, the same strategy employed by Adobe CEO Shantanu Narayen when he faced similar questions last month, but Jones remained unconvinced.
Apple didn’t escape the hearing unscathed, either. When asked why music and movies routinely sold for higher prices in Australia than elsewhere, Apple Australia’s managing director Tony King told attendees that the record labels and music studios were to blame. He went on to explain that rights holders demanded higher wholesale prices in Australia than elsewhere, despite Apple’s push for more consistent pricing. "