You may think the IT pricing inquiry by the House of Representatives Committee on Infrastructure and Communications, initiated by Labor’s Ed Husic just over a year ago, merely confirms what you knew about the extent to which we’re being gouged by big IT firms across hardware, software and content.
And indeed it does. Adobe software, 42% more expensive here. Microsoft 66%. Autodesk 51%. Hardware (Apple, surprisingly, excepted) 46% dearer. Music, 52%. Games, 84%. And as the committee explained, it’s not just consumers feeling the impact of this gouging: the higher education sector, Australians with disabilities and Australian businesses share the pain. You can read the committee’s list of recommendations, including its innovative and welcome suggestion that governments work actively to help consumers undermine geoblocking.
And the same rubbish excuses from the companies — tax, rents, high wages, regulation — that we’re used to hearing are also there, all rejected by the committee as insufficient to explain the extraordinary differences in prices for the same product here and offshore. Of this dog-ate-my-homework stuff from the big IT and content providers, two excuses stand out as impressive. Adobe’s representative, appearing before the committee, tried to argue with a straight face that consumers benefited from the “local content” that appeared on sites to which the company redirected them when they tried to buy products from the US. Husic and Labor MP Stephen Jones pulled him up.
Husic: What is the local experience, then, that people are obtaining? What is the benefit of it?
Robson: There is access to user groups, communities, information, local pricing, local offers et cetera.
Jones: Chat sites and blog sites?
Robson: Exactly, yes, user communities where—
Jones: How much are you suggesting we should be paying for access to blog sites?
Robson: No, I am talking about the personalised experience when a customer is online with adobe.com … One of our key interactions with our customer base is to allow them to talk amongst themselves and to work with us and to provide input into future innovation.
So there you go — you pay 42% more for Adobe products so you can talk on a blog with other Adobe users. Presumably about how much you’ve been gouged.
The other was even better; a number of companies maintaining that consumers don’t like inconsistent pricing that reflects changes in the exchange rate. Microsoft: “[our] global policy is to provide consistent and predictable local pricing.” Apple: not pricing to reflect currency movements “is less disruptive for local customers and local business channels”.
Were you aware that you didn’t like it when prices fell to reflect increases in the value of the dollar? That your need for consistent and non-disruptive pricing was greater than a crass desire for cheaper products? Fortunately, Microsoft and Apple know you better than you know yourself.
And who else backed the argument that consumers and businesses don’t like it when prices fall? The Australian Industry Group. AIG submitted that prices shouldn’t change to reflect currency fluctuations because of “the desirability for consumers, suppliers and retailers of having relatively consistent pricing of goods”. AIG also argued that “it would be impractical to constantly reset these prices based on frequent movements in the spot price”.
But … hang on. Isn’t AIG normally one of the primary complainants about how costly it is in Australia to do business? Why, it’s only a couple of months since the AIG called for a tiny minimum wage increase because “businesses are struggling to cope with high costs and the high Australian dollar which have reduced their competitiveness”.
I’m thus a little confused — when it comes to wage submissions, AIG is all about costs to business and the impacts of the Aussie dollar; when it comes to IT pricing, AIG is, like, “nope, leave prices high for consumers and businesses even if the dollar goes up, it’s too much effort and everyone loves consistency”.
That wouldn’t be because Microsoft Australia is an important partner of AIG, would it?
Indeed the committee report is littered with the sight of bodies ostensibly intended to represent the interests of Australian business slavishly following the diktats of their offshore masters. The Australian Information Industry Association happily relayed all the excuses of the large IT firms about gouging, including that Australia was more expensive because of its “low density geography” and that Australian wages had “risen dramatically” (something Aussie workers would be surprised to learn).
The Australian Home Entertainment Distributors Association whinged about piracy hurting content companies. The Australian Publishers Association also whinged about piracy (the piracy line was demolished by the committee, citing massive growth in global content revenue) and tried to justify regional pricing for books.
And the Australian Recording Industry Association initially refused to cooperate with the committee in trying to nail down who exactly is responsible for the massive gouging on iTunes. Apple had told the committee it would only be too happy to lower prices for Australians, but it was not permitted to by content owners. ARIA, a fully paid-up member of the copyright mafia, eventually tried to claim it was actually partly Apple’s fault that prices differed, then said we shouldn’t expect to be able to download music in Australia for the same price as Americans could because we had to pay for the costs of local outlets for copyright owners even if we didn’t buy from them. Universal claimed different prices were entirely Apple’s fault.
You might have known about how much you are being gouged. But the committee’s report has also shone a light on the extent to which Australian industry bodies, for all their rhetoric, are prepared to conspire against the interests of Australian consumers and businesses to perpetuate that gouging by their offshore masters.