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Parliament probes technology price gouge

Date

Stephanie Peatling, Jim O'Rourke

Apple and Microsoft will be asked to explain why Australians pay more for consumer goods.

Apple and Microsoft will be asked to explain why Australians pay more for consumer goods.

Apple and Microsoft will be among technology companies asked to explain to Parliament why Australians pay much more for music and game downloads from iTunes, for example, than overseas customers.

Federal Labor politicians are hoping the publicity generated by calling the companies to account for their pricing policies will result in prices dropping.

The Minister for Communications, Stephen Conroy, has signed off on the parliamentary inquiry, which will also consider pricing of software and other IT-related material and could have big implications for businesses.

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''There is evidence to suggest that the innovative use of technology is not always matched with innovative new business models in the case of products and services distributed online,'' Mr Conroy said in a letter to Sydney MP Ed Husic.

''I agree that Australian businesses and households should have access to IT software and hardware that is fairly priced relative to other jurisdictions … the global digital economy is likely to make it increasingly difficult to sustain business models that are based on a geographic carve-up of markets.''

The terms of reference for the inquiry are being finalised by Mr Conroy but it will begin later this year and be conducted by the House of Representatives standing committee on infrastructure and communications.

Consumer advocate Choice, which had been lobbying for an investigation of the price differential, welcomed the inquiry.

The excuses overseas technology companies used to justify the higher prices, such as the small size of the market, the cost of setting up support centres and the imposition of local taxes and duties, were not acceptable, Choice spokeswoman Ingrid Just said.

Mr Husic, a member of the committee who has been raising the issue of price differences for more than a year, said he believed it would be the first time the top software and computer companies had been called before a parliamentary inquiry to explain their pricing policies.

It will also look at e-books if price differences in that market are raised.

Invitations to appear will be sent to all the big computer and software companies including Apple and Microsoft.

Neither company responded to calls from The Sun-Herald.

The debate over pricing surfaced again last week when global software company Adobe revealed Australians would pay up to $1400 more for the same software compared with US residents.

"People here scratch their heads trying to work out why they get fleeced on software downloads,'' Mr Husic said.

Mr Husic said young people and small-to-medium businesses had been particularly vocal in raising the issue with him. "Small to medium-sized businesses might pay over $10,000 more on software compared to overseas counterparts,'' he said.

Web developer Daniel Myles, who has been tracking price differences, said he referred to it as ''the Australia tax, the tax we pay just by being in Australia''.

A Productivity Commission report into retailing, released last year, said company excuses for this, such as Australia being a small market, ''in most cases are not persuasive, especially in the case of downloaded music, software and videos, for example, where the costs of delivery to the customer are practically zero and uniform around the world''.

Technology commentator Trevor Long said: ''People are already setting up, in droves, addresses in America just so they are able to download a piece of American software at American prices.''

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