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Juan MC Larrosa
'We'd love cheaper prices': Apple defends high costs
JENNIFER DUDLEY-NICHOLSON AND CLAIRE PORTER
SOFTWARE giant Microsoft has admitted it slugs Australian customers significantly more for its products in a federal committee today and said if customers didn't like it they would "vote with their wallets".
Microsoft became the latest international technology company to face the House of Representatives committee into information technology prices this afternoon, following evidence from Adobe and Apple.
Microsoft Australia managing director Pip Marlow said the company did not create one price for all global customers and instead set a different, higher price for its Australian users.
"Is there a price differential for our customers? Clearly yes," Ms Marlow said.
"We don't set a global price for our products. We do not operate on a standard price because we do not believe that every market is the same."
Ms Marlow said Australian prices were determined based on competition in the market, and said customers who did not approve of their software prices would buy software elsewhere.
"Our customers will vote with their wallets," she said.
Ms Marlow refused to comment directly on claims by Member for Chifley Ed Husic that a Microsoft software suite that cost $2324 in the US and Singapore cost $4136 in Australia.
Earlier today technology behemoths Adobe and Apple defended slugging Australians with high prices.
Adobe defended charging Australians more than $1000 extra for its publishing software by claiming that Australians were receiving a "personalised" service on its local website.
Addressing the House of Representatives committee on information technology pricing today, Adobe Australia and New Zealand managing director Paul Robson was questioned about why the company charged Australians 167 per cent more -- $3175 versus $US1899 -- for its Creative Suite 6 software.
Mr Robson said consumers in this country were automatically redirected to the company's Australian website so they could access local discounts and community groups, and purchase Adobe's software at local rates.
Mr Robson said Adobe's use of Australian-only pricing or "geoblocking" was a "well established and legal process" yet he failed to explain why Australians were paying significantly more for the same product.
"We're acutely aware that we can only succeed if we deliver innovation," he said. "If our customers believe they can get better value elsewhere, they simply won't do business with us."
Mr Robson said the company had last month lowered the price of access to its Creative Cloud software service to Australia to deliver fairer prices.
Technology giant Apple defended slugging Australians more for music, movies and TV shows, blaming the content owners for charging a higher "wholesale price" for media delivered to Australian eyes and ears.
Apple Australia vice-president Tony King told the committee that the company would "love to see lower content prices" in Australia but music label deals and copyright issues prevented it from offering lower prices or opening its US iTunes Store to a global market.
Mr King said record labels and TV and movie rights owners were responsible for setting different digital content prices in different markets and they should be the companies called before the federal committee.
"We would love to see cheaper, lower prices in the Australian market," Mr King said. "The difference in a price will stem from the different in a wholesale price from the owner of the rights."
Mr King said Apple was not responsible for setting these geographically different prices and, despite them, prices in the Australian iTunes Store were "similar" to prices charged in Australian retail stores.
In response to a question by Member for Chifley Ed Husic, Mr King said Apple could not legally open its US iTunes Store to Australian customers.
"When (an individual piece of content) is licenced to iTunes, a condition of that negotiation is that we make it available only for specified markets," he said. "Most rights are still today on a territory by territory, market by market basis. There are few rights that are truly global and that creates confusion for customers."
Mr King said Apple had taken great lengths to ensure its own hardware products were priced at "parity" in Australia, taking into considerations the Australian GST and costs associated with delivering products in Australia.
Earlier, consumer group Choice told news.com.au it has five big questions for the tech companies.
1. Why is it costing Australians 70 per cent more to rock out to AC/DC’s Back in Black on iTunes?
2. Why does it cost a graphic designer in Adelaide $3175 to buy Adobe CS6 Design and Web Premium when a creative in Los Angeles only has to pay $US1899?
3. Why does it cost a small business in Sydney $599 to buy Microsoft’s Office Professional 2013 when a business in San Francisco only has to pay $US399.99?
4. How many of their staff in Australia work on developing software?
5. Who sets the pricing on iTunes - Apple or the music and film industry?
Matt Levey, head of campaigns at Choice said there is "no justification" for why Australians are paying more than US consumers for identical products.
"We have heard all sorts of excuses from the tech companies, like claims that Australian wages, rent and taxes are too high and that our warranties are onerous," he said.
"Our research shows that none of the excuses stack up and the only conclusion is that the technology companies are greedy."
"Today, Adobe, Apple and Microsoft have every opportunity to come clean on their dirty deeds," says Mr Levey.
News.com.au is covering the hearings throughout the day.
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