Microsoft, Adobe, Apple poorly justify Australian price gouging

Representatives from Microsoft, Adobe and Apple all were forced to front up to a parliamentary hearing in Australia yesterday, in an attempt to justify the ludicrous price gouging that occurs in the country. We previously reported that it's cheaper to fly to the United States and buy Adobe CS6 there than buy it in Australia, but that's not the end of the price-gouging, as companies often charge a premium of more than 70% in Australia compared to the United States pricing.

Microsoft failed to soundly justify the pricing discrepancy for the full suite of Office at the hearing, which sees the Professional edition retail for AU$599 compared to just $399 in the States (a 55% premium). Microsoft Australia's managing director Pip Marlow claimed that if the prices for products were too high then "customers will vote with their wallets", while she also pointed to the more fairly-priced Office 365 cloud subscriptions.

However that didn't stop Australian MPs from calling out Marlow on the dodgy local practices: MP Stephen Jones claimed that Microsoft charges "as much as the market can bear", and refuted claims the market was highly competitive. "Microsoft can charge what it likes and the small businesses of this country have to pay because there is little alternative" said Jones.

As for Adobe, managing director Paul Robson deflected criticism that the boxed copy of Creative Suite 6 costs 75% more in Australian than in the United States, pointing to cloud solutions as the more fairly priced alternative. Robson indicated that the boxed copy pricing discrepancies were caused by a different delivery mechanism, however he failed to properly explain why the price difference is so massive.

Apple had the best explanation out of the trio, stating that digital content was marked up in Australia due to higher wholesale costs from contracts with record labels, music studios and TV networks. Apple Australia boss Tony King stated that "In Australia, they have often set a higher wholesale price than the price of similar content in the United States." He also said he did not believe that Apple hardware prices are materially different from the prices set in Australia, after conversions and tax are factored in.

This is just the first step into the examination of tech price gouging in Australia, as angry consumers continue to demand answers for the unjustified high prices that they are forced to pay in the country.

Source and image: SMH

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47 Comments

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I'm sure when it comes down to it, the government has a much larger hand in the higher costs than they would ever accept.

and this is why us australians are importing everything, because here it costs to much, **** em i say ill either pirate it or import it from now on

It is sad that in Australia and New Zealand one has to pay so much for these programs when yes, it is indeed cheaper in the US. Taxes, duties and even wage inflation aside, the cost is still too much. If customers are forced to pirate the software then these companies only have themselves to blame when they lose out in sales.

The blame of wages is pathetic at best given that the size of their presence in both NZ and Australia amounts to an office filled with half a dozen people who work in marketing. Localisation is another load of crap they throw around whilst ignoring they could easily just re-use the British English localisation with a few tweaks and call it a day. End of the day what the government should force is Adobe to sell products at the same price as they do in the United States.

Consumers should vote with their wallet and boycott Microsoft, Apple & Adobe. Unfortunately they don't, which is why these software companies get away with it. I have family in Australia that ask me to buy them computer software like Office and a Macbook for them, in the USA and send it to them in Australia. So much cheaper. I love Australia but it's so bloody expensive down there.

Somewhat. Should see the "data plans" (snicker) for the idiot governments new national broadband network. People will blow through them in the first few days!

It's not really fair to consider them garbage since they do provide the best connection in terms of reliability/consistent performance in australia.
As for better value yeah definitely an improvement with regards to upload speed

telstra 100mbit/2mbit 500GB $100/month (probably $130 without bundle)
nbn 100mbit/40mbit 1000GB $100/month

although the nbn price is quite confusing why does it cost the same for 1000GB or 400GB plans at 100/40?

http://www.whistleout.com.au/B...eless-Modem&contract=24

http://www.whistleout.com.au/B...m=BYO-Modem&contract=24

are they really sacrificing 600GB quota if you provide your own modem? I hope i'm reading it wrong

:...as angry consumers continue to demand answers for the unjustified high prices that they are forced to pay in the country."

Forced??? Use another product. Problem solved.

Edited by COKid, Mar 23 2013, 2:11am :

Or just don't pay? I mean the price for many programs sold is too high.. Never payed for any software I own and I don't plan on ever paying them if they keep putting their prices so high for their programs

Our government doesn't really care, If Microsoft charge more, then they get more in tax. The only time it hurts our government (so they care) is when we buy from overseas and they don't get a cut.

'"Microsoft can charge what it likes and the small businesses of this country have to pay because there is little alternative" said Jones.'
But that's a free market, doesn't everyone want and love capitalism or is that just the US telling everyone they should love it...

Yeah, this is just awful I feel.

Not sure of the legitimacy, but someone was saying that with the Adobe software, you could literally fly to the US, purchase it, and fly back cheaper than what they'd charge in Australia. Any Aussies to back that up?

dead.cell said,
Yeah, this is just awful I feel.

Not sure of the legitimacy, but someone was saying that with the Adobe software, you could literally fly to the US, purchase it, and fly back cheaper than what they'd charge in Australia. Any Aussies to back that up?

Yeah it's true... So duty free in the states should start selling software? :lol:

Vandalsquad said,

Yeah it's true... So duty free in the states should start selling software? :lol:


HAHA!
Yes! Duty Free computer store at airports in the western USA. Land, shop and fly back home. No need to ever leave the airport.

desitunez said,
It should be cheaper in Australia , 1 AUD = 1.0444 USD

Before tax, sure. But Australia includes tax in the list price, which compounds the discrepancy.

People with more than half a brain know that voting with your wallet means giving your money to a competitor, NOT piracy.

But piracy evangelists were never the brightest bulbs, and are ultimately all about ego and looking for ways to feel justified in their actions.

Joshie said,
People with more than half a brain know that voting with your wallet means giving your money to a competitor, NOT piracy.

But piracy evangelists were never the brightest bulbs, and are ultimately all about ego and looking for ways to feel justified in their actions.

That's the ideal, but it doesn't really work in this case. We live in a world of one horse races when it comes to this sort of thing. I mean, people can jump ship from Windows to OSX, but Apple are also being accused of price-gouging. So that leaves Linux, which isn't an option for many due to compatibility and ease-of-use.

It's even worse with Adobe though. If you're a professional graphics company, where do you go for an alternative to Photoshop?

Majesticmerc said,

That's the ideal, but it doesn't really work in this case. We live in a world of one horse races when it comes to this sort of thing. I mean, people can jump ship from Windows to OSX, but Apple are also being accused of price-gouging. So that leaves Linux, which isn't an option for many due to compatibility and ease-of-use.

It's even worse with Adobe though. If you're a professional graphics company, where do you go for an alternative to Photoshop?


Grand. So where exactly has there every been any evidence that piracy has communicated anything to companies other than that they've got to find new ways to combat it?

The idea that pirating commercial software somehow sends a "message" to its publishers--that it's voting with one's wallet, despite no wallet being involved in piracy--is defective thought and just the cheap, crappy justifications of an egoist who wants to feel righteous about breaking the law.

It's like being ****ed that admission to Disney World costs too much, so you sneak in instead and encourage other people to do it because it "sends a message".

Joshie said,

Grand. So where exactly has there every been any evidence that piracy has communicated anything to companies other than that they've got to find new ways to combat it?

The idea that pirating commercial software somehow sends a "message" to its publishers--that it's voting with one's wallet, despite no wallet being involved in piracy--is defective thought and just the cheap, crappy justifications of an egoist who wants to feel righteous about breaking the law.

It's like being ****ed that admission to Disney World costs too much, so you sneak in instead and encourage other people to do it because it "sends a message".

FWIW I didn't intend to promote piracy (although upon re-reading it I can see why it might come across that way). What's the solution though? Looking specifically at this Australia situation, if you don't want to get ripped off what's the alternative?

Majesticmerc said,

FWIW I didn't intend to promote piracy (although upon re-reading it I can see why it might come across that way). What's the solution though? Looking specifically at this Australia situation, if you don't want to get ripped off what's the alternative?


Let derps derp. There is no solution. No, Open Office is not a solution to Microsoft Office. No, GIMP is not a solution for Photoshop. People have to work, and small time users can't afford. What do you think happens?
Not paying sends a message to companies. What more, in their idiotic eyes, pirated copy = lost sale, so even better. No matter what they do, piracy will prevail. The less people buy, the more they will feel it.

@Leo said,

Let derps derp. There is no solution. No, Open Office is not a solution to Microsoft Office. No, GIMP is not a solution for Photoshop. People have to work, and small time users can't afford. What do you think happens?
Not paying sends a message to companies. What more, in their idiotic eyes, pirated copy = lost sale, so even better. No matter what they do, piracy will prevail. The less people buy, the more they will feel it.

I'm sorry, the only derp I was derping was asking for evidence that piracy sends the "intended" message to companies, and your response was nothing but a personal attack and a reiteration of the same statement with the same lack of evidence.

Here's a hint at life: saying something is true does not make it so. Saying it again does not make it so. Repetition is not proof. People getting tired of you and walking away is not admission of defeat. Not understanding any of this is a big sign of being an egoist. Put more thought into your beliefs.

Just some advice.

They deflected pretty much every question asked of them.

End of the day, they'll continue to overcharge Australian consumers simply because they can.

how are they overcharging? isn't min wage $15 vs the US's $7?

Jockulation said,
They deflected pretty much every question asked of them.

End of the day, they'll continue to overcharge Australian consumers simply because they can.

Try lowering your taxes. Your taxes are about $1.40 a gallon? or 0.38 per litter. USA tax is 48 cents a gallon, or 12 cents a litter.

If my maths are right, your fuel tax is 1/4 yours.

Sound like a typical Tony Abbot comment.. Having a rant with no substance. In FACT it is the Liberal government in Australia who dismantled many regulatory bodies in the name of better competition, competition that rarely occurred and ultimately bit the consumer. It is John Howard's ACCC that is gutless.
I don't expect you to be convinced though since like all the Abbot supporters, facts should never be considered. Nothing that Abbot has ever said would happen has ever come to pass... This is not very good for someone who will probably be Australia's future PM.

dvb2000 said,
typical toothless Australian labor government, totally ineffective. The sooner we boot them out of power the better.

Out of interest, what do you expect a Coalition government would do? Set price controls?

We have the same price gouging here in the UK, Australia isn't alone. The product mentioned RRP is £399 which converts to $607.90 dollars in American money at today's rates.