Australians pay 66% more for Microsoft products than the rest of the world

A 66% premium? Sure, let me write that in Excel

We’ve seen price disparity in the tech industry for a long time now. We all know that buying stuff in Europe is a bit more expensive than in the States and that's usually explainable due to import tariffs, different laws, price of transport, etc. But it seems all these factors combined can’t even begin to explain the price disparity between Australia and the rest of the world when it comes to hardware and software.

According to a parliamentary inquiry Australians pay, on average, a 50% mark-up compared to other countries. And while a small part of this can be explained by the reasons listed above, it seems that most of the money is simply added on for no good reason. The committee noted that this adds up to “international price discrimination to the clear disadvantage of Australian consumers and businesses”.

The report even quotes a story we did earlier in the year, that showed that it was cheaper for an Australian to get on a plane, fly to the States, buy Photoshop there and then return home, than actually purchasing the software directly in Australia.

But it seems Adobe isn't the only company at fault here, nor is it even the one with the highest mark-up. In fact, Microsoft seems to have the highest premium on its product with Australians paying 66% more for the company’s products compared to the rest of the world. Adobe “only” reached 42% while Autodesk took the middle road with 51%.

The worst part of the practice is that on top of the regular consumer this ends up disproportionately hurting educational institutions, small businesses and folks who rely on accessibility software. The report does put out a ten point plan to try and address this situation with legally banning “geoblocks” so Australian consumers would have access to software designed for the States or Europe, being seen as a last resort.

Source: The Guardian | Image via Microsoft

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36 Comments

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Prices are what the market will bear. Are the prices being compared by PPP or exchange rate? Exchange rate is not valid as it's determine purely by import/export activity. You have to compare the cost of the item verse income including government entitlements.

I stopped buying Adobe products in the UK due to their price fixing. And in the days of digital distribution and cloud computing, why should I pay >40% more than people in the US?

I am quite proud that all my software in purchased, but I make an exception for those crooks at Adobe.

I don't know about Australia, but in corrupt countries high price can be an indicator of "bribe tax" which is paid by taxpayers. This is how it works: Authorized reseller, who controls local market, makes huge contracts with the government. Seller would rise the price of items in the contract to cover the bribe. Of course, high contract price, would raise suspicion of corruption, so seller sets same price for the retail market to eliminate that suspicion. Seller don't care about price for the masses because major profit comes from contracts which involves taxpayer's money. Seller returns price difference to government official (or nominated party) after payment is made. Problems is that it looks legal and allows for corrupt government representatives to play "dumb and incompetent card" by saying that they are just paying "market prices".

We just recently purchased Exchange 2013 Standard at the cost of Exchange Standard + Enterprise......my boss was not amused when our IT Manager revised the costings to the Australian market prices instead of the US.

Part of the additional costs go to ensure the discs covers are properly flipped upside-down and that no lethal scorpions, snakes or spiders end up in the boxes (no guarantees about alligators/sharks though).

francescob said,
Part of the additional costs go to ensure the discs covers are properly flipped upside-down and that no lethal scorpions, snakes or spiders end up in the boxes (no guarantees about alligators/sharks though).

except we don't have alligators.. we have crocodiles. Much meaner

Oops slight typo there, Pro pack wasnt 88/99 etc. That was Win8 itself.

I dont know how much it was when it came out, but it's now selling for $300 in some shops here

If you think its a ripoff, in oz, you havent been to NZ.

For that Windows 8 pro pack in NZ, its $300 lol in some places now. It started off at 88, then to 99 in some shops, then 150, then to 299/300. Thats twice the price of the windows 8 32/64 bit DVD (about $148 here)

And I see at Jbhifi in oz, you can get an Xbox one for $599. And $598 at Dick Smith. It'll be $749 here when it's out

And the PS4 is $548 in oz, and it'll be $649 here when it's out

Jeez - and I thought we got screwed in the UK. Was going to say, what causes the higher prices? Is it government taxes, or are companies just in a situation where they can charge what they like, because everyone else in Australia is doing the same?

Chicane-UK said,
or are companies just in a situation where they can charge what they like, because everyone else in Australia is doing the same?

its the old "greed is good" mantra imported from the USA, by the American CEO's that our company boards of directors love to bring in to run our companies, because "they know how to run them"

They OPENLY say that charge "what the market will bear" in Australia, in other words they keep jacking up the price until the see a falloff in profits.

dvb2000 said,

its the old "greed is good" mantra imported from the USA, by the American CEO's that our company boards of directors love to bring in to run our companies, because "they know how to run them"

They OPENLY say that charge "what the market will bear" in Australia, in other words they keep jacking up the price until the see a falloff in profits.

What else is there to say really - the greed of these companies literally knows no bounds. Screw everyone as long as the shareholders and senior executives are swimming in cash.

Chicane-UK said,
Jeez - and I thought we got screwed in the UK. Was going to say, what causes the higher prices? Is it government taxes, or are companies just in a situation where they can charge what they like, because everyone else in Australia is doing the same?

We still get screwed, just a lot worse in AUS.

Chicane-UK said,
Jeez - and I thought we got screwed in the UK. Was going to say, what causes the higher prices? Is it government taxes, or are companies just in a situation where they can charge what they like, because everyone else in Australia is doing the same?

There are plenty of reasons, but probably the main reason everything is expensive in Oz is because the wages of staff are astronomical. Minimum wage is over $17p/hr. Compare that to about $9 if you convert in the UK (no idea what it is in the states, if there even is one). By having a minimum pay that high and more senior jobs proportionally higher, it increases costs at every part of the supply chain. There isn't a lot of excuse for the higher digital distribution costs to be fair!

But hey, if the Aussies are smart about it, they can buy online and get great deals because of their high salaries and still quite strong dollar.

I blame the Government just as much as the IT companies

Government : Import TAX , GST , Carbon TAX , then the seller sells it at its own price ( on top )

EvilAstroboy said,
I blame the Government just as much as the IT companies

Government : Import TAX , GST , Carbon TAX , then the seller sells it at its own price ( on top )

The comparison takes off the GST and there are no tariffs on imported software. NZ'ders are get royally screwed but it does help that amazon is anti international customer by refusing to sell boxed software to international customers.

EvilAstroboy said,
I blame the Government just as much as the IT companies

Government : Import TAX , GST , Carbon TAX , then the seller sells it at its own price ( on top )

Carbon Tax. Lol, stop listening to Alan Jones, you're talking nonsense.

ZipZapRap said,

Carbon Tax. Lol, stop listening to Alan Jones, you're talking nonsense.

You know that Truck driver ( higher fuel cost ? ) have to pay carbon tax ( delivery to companies , from Docks to distributors , etc etc ) witch will bump up the prices of the product

Guess you didn't now that

EvilAstroboy said,
You know that Truck driver ( higher fuel cost ? ) have to pay carbon tax ( delivery to companies , from Docks to distributors , etc etc ) witch will bump up the prices of the product

Guess you didn't now that

Yes we did know that at the cost is minuscule on something as light as a box of software. Lets assume just for the lulz that you're correct - that still doesn't explain the price disparity when it comes to downloadable versions or are you claiming that internet traffic are now charged a 'electron tax'?

Mr Nom Nom's said,

Yes we did know that at the cost is minuscule on something as light as a box of software. Lets assume just for the lulz that you're correct - that still doesn't explain the price disparity when it comes to downloadable versions or are you claiming that internet traffic are now charged a 'electron tax'?

Some countries do have a Tax on Digital downloads ....

Anyway, Most IT products are not made for "Download" ( for "LULZ" lets assume we can download a Lumia 1020 , shall we ? or a PS4 or a XBOX1 ) , but Most software ( that CAN be downloaded ) yes the prices are high ( even without TAX ) ,

Here's proof:

AU: http://www.officeworks.com.au/...perating-Systems/MSWINPRO7U
US: http://www.newegg.com/Product/...t.aspx?Item=N82E16832116714

That's why I buy OEM versions, or PCs that I already have OEM versions for.

(Officeworks is one of the more extreme cases by the way - it pays to shop around.)

Windows 8 is cheaper though! Huh?

AU: http://www.officeworks.com.au/...Operating-Systems/MSWIN8PUP
US: http://www.newegg.com/Product/...t.aspx?Item=N82E16832416563

Maybe our prices are still a year behind!

Edited by 68k, Jul 29 2013, 9:59am :

Even "just" outside of US there is disparities, look at the prices of Latinamerican countries, or even just look at the prices of Mexico in both hardware and software, it's ridiculous. Somebody is playing hard to maintain that price fixation.

Please, we pay more for EVERYTHING! Not just MS software. I can buy something off Amazon for significantly less and even with postage included it's still cheaper than anywhere else in AUS.

HoochieMamma said,
Please, we pay more for EVERYTHING! Not just MS software. I can buy something off Amazon for significantly less and even with postage included it's still cheaper than anywhere else in AUS.

Yup. I import everything now.

tsupersonic said,
It really is everything. Cars are crazily priced there - it boggles my mind.

There was also a reddit post: http://www.reddit.com/r/todayi...per_to_fly_to_the_usa_from/
That is just insane

The cars are outrageous in Oz if they are imports (especially the European imports), there are high import taxes and then a luxury car tax for everything over about $55k. The locally made Holden and Ford cars aren't too expensive though.