Published on the 30/07/2013 | Written by Newsdesk
A Government investigation into the prices that corporates and consumers pay for technology has confirmed that Australians pay 50-100 percent more than overseas peers for the same products…
The House of Representatives Standing Committee on Infrastructure and Communications this week handed down its report ‘At what cost? IT pricing and the Australia tax’, which indicated Australians can pay 50-100 percent more than their overseas peers for the same products.
That report sets out the stark consequences for business saying, “High IT prices make it harder for Australian businesses to compete internationally.”
While ICT vendors appearing before the Committee – in the case of Apple, Adobe and Microsoft, only after being summonsed – argued that there were multiple and complex reasons for the higher prices, often associated with the structure of the industry, high wages costs, and localisation, the report found that for the most part prices were high simply because of the vendors’ regional pricing strategies and an approach which saw them charge “what the market will bear”.
When it comes to professional software, Adobe products are on average 42 percent more expensive in Australia; Microsoft products 66 percent dearer; and Autodesk 51 percent higher. Perhaps paradoxically the most acute pricing differentials were discovered on digitally delivered content, where arguably there are fewer local variables to distort pricing.
The report found that on average hardware was 46 percent more expensive here than overseas, and Epson printer cartridges cost twice as much as they do elsewhere.
While the Committee has relatively little ability to compel vendors to change their pricing policies, which although unpalatable are perfectly legal, the report has confirmed the extent of the problem which business has complained of for many years and as such it could provide a useful lever in pricing negotiations.
The Committee has also made a series of recommendations, which if adopted, should aid in the tracking of prices and offer more flexibility to technology buyers, by allowing them to circumvent some of the geoblocking and warranty mechanisms used by vendors to attempt to force Australian users to buy ICT products and services locally. It has also called on the Australian Bureau of Statistics to develop more comprehensive statistics on ICT spending; called for the ban on parallel importation to be lifted; and for the repeal of a section of the competition laws which currently exempts certain intellectual property from the legislation.
To learn more you can download the report here.
