Parliament Probes Technology Price Gouge

Parliament probes technology price gouge

Stephanie Peatling, Jim O'Rourke

April 29, 2012

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.

''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...