The Government’s inquiry into local price gouging for tech seems to be going swimmingly, but now that the first hearings are over and the dust is beginning to settle, questions are emerging as to what the government can actually do to stop these companies charging Australians through the nose. Can the government actually stop industry gouging? We can reveal new information that says that perhaps it can.
The man who spawned the inquiry in question, Federal Member for Chifley Ed Husic, has said that he’s disappointed major multi-nationals like Microsoft and Adobe don’t feel the need to appear before the inquiry to justify the enormous mark-ups on their software, and I’m inclined to share in that disappointment.
It’s almost like these companies don’t feel like the inquiry is worth their time. After all, they show up to US government hearings at the drop of a hat. I said on ABC TV’s The Drum earlier this week that it’s almost like these companies don’t feel like the issues surrounding the Australian market are worth their time.
Given that companies aren’t co-operating directly with the government after a round of public hearings, can the IT Pricing Inquiry actually make a difference? Can the government stop the Australia Tax? From cursory observations, I’d say no, but there are gears moving behind the scenes that represent light at the end of this price gouging tunnel.
We’ve been chatting to sources close to the inquiry, and they’ve told us that one option that is being considered is changes to Federal competition law that will make it illegal for vendors to block an Australian’s access to cheaper international prices for software if it is purchased via an online distribution method.
It is understood that companies would still be allowed to georoute users — that is, point them at Australian prices first — to Australian-priced stores, but the users would then have the option of changing their country to the US to take advantage of cheaper prices.
Further public hearings are being considered to discuss these issues with the industry.
Even if these measures don’t get up over the long-term, the IT Pricing Inquiry has done worlds of good for awareness of the Australia Tax. More people than ever will now turn to other means of getting their software, hardware, gadgets and games if they know that the company they’re buying from in Australia is looking to hit their hip pocket more than is necessary. It’s public awareness of shoddy business practices that hurts these companies in the short-term.
The Immediate Damage
When Justice Mordy Bromberg ruled that Apple pay $2.25 million for claiming that the new iPad was 4G-compatible in Australia, he said that Cupertino had lost more than money in the case — he said that the company had lost some of its precious reputation that it relies upon to stay popular in Australia. This is true for more than just Apple.
It’s the adoration of the public that keeps these companies in business. It’s Adobe’s position as a maker of software for professionals that keeps people buying outrageously priced copies of Creative Suite. It’s an IT manager’s need for quality that has them paying 100 per cent mark-ups on hypervisor software, and it’s the consumer’s lust for gadgets that has them lining up around the block for every new iDevice that’s launched by Apple.
These companies trade on their image, and the more this inquiry can do to tarnish the image of those who don’t comply and confess their crimes, the better in my opinion.