Australian Government Slams Adobe, Microsoft, Apple For Sky-High Prices, Recommends Citizens Circumvent Such Measures

Australian Government Slams Adobe, Microsoft, Apple For Sky-High Prices, Recommends Citizens Circumvent Such Measures

If you live in the United States, chances are that you don't think much about the prices other people pay for US products. Everyone is generally aware of the exchange rate, so it's logical to assume that a game, PC, or other product costs the same here as it does in England or Australia, save for shipping costs and taxes. It might surprise you, therefore, to learn that companies like Microsoft and Adobe make huge profits off foreign customers by drastically inflating prices well beyond their US equivalents.

Sixty years ago, there was some logic as to why a product made in America would cost more in Australia than here, and the Australian dollar, historically, was much weaker than the United States' equivalent. That gap has nearly vanished; $1 AUD is now worth about $0.92 USD, but software products -- including digital software purchased without a boxed copy in the first place -- are still as much as 50% more expensive. When the Australian Parliament went looking for answers, it slammed into a wall of obstinate silence, misrepresentation, and deliberate obfuscation. For more than six months, the Australian government invited various companies to submit materials or send representatives to explain the situation, with virtually no result. Finally, it compelled the testimony of Apple, Adobe, and Microsoft.

Geoblock
Image credit: Daniel Dionne

Geoblocking:

In the US, we typically talk about region locking as it relates to video games, but the practice is common in other countries. Companies have erected formidable barriers to lower price access and will not sell a US copy of a product to an Australian if they detect an Australian IP address, credit card number or address. From Parliament's perspective, these practices have been used and abused to artificially create markets in which the Australians are forced to pay higher prices for access to the same material. The median higher price for Adobe software was 49%, Microsoft: 67%, and Autodesk: 46%. Australian computer hardware is 26% more expensive on average, music is 67%, and games are 61% more expensive. A product that costs US $59.99, in other words, is a $95 purchase in Australia.



Unsurprisingly, Microsoft and the other companies yanked on to the carpet weren't very happy about these findings and complained that they were justified. The committee, in polite language, invited Redmond to get bent, noting that it made every effort to build comprehensive price models and was stymied by corporate refusals to provide the data that they claimed was missing. Digital downloads -- where price gaps should be smallest due to the complete lack of a physical product -- were actually the largest. The Australian version of Microsoft Visual Studio Ultimate, for example, is $20,775. The US price for the same package? $11,899. Microsoft was categorically unable to explain how this was fair.

And Now, To the Advocacy:

The investigative committee doesn't actually advocate piracy. What it does advocate is that consumers should take every possible opportunity to avoid paying the geoblocked price for music, movies, games, software, and other digital content. Furthermore, it has called on the government to issue clarifying remarks (and possibly legislation) to better define what does and does not qualify as infringement or abuse given that Australian consumers perceive <em>themselves</em> as badly abused by a corporate copyright racket that charges them 50-60% more for identical products.

Whether this will have any long-term impact on policy is unclear, but the government is clearly tired of being a piggy bank for the profits of other companies.
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Australia has every right to make a fuss about this. The prices they have to pay for consumer hardware and software is inhumane. Corporations are taking advantage of them, and these corporations are evil enough to continuously exploit these unjust costs upon them.

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I agree its bs.... why do we have to pay so much more for digital media....

To buy adobe CS or something like that's cheaper to fly to the USA buy it in a retail shop then fly back.

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This only exists because it was allowed to over a long period of time.

The landed price should be the same no matter the region.

A digital download should cost the same worldwide.

The governments don't exactly have clean hands in screwing over consumers.

I pay 20% to the government here on every order I import that amounts to $100 after the declared value and shipping cost are added together.

Often their taxes and import duties are the deal breakers and not the corporate greed of Apple,Microsoft,Adobe and the rest of the gang.

Every day now I'm reading about record profits by Apple or another household name.

Some cheaper prices instead of record profits might go a long way in boosting economies.

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VAT is different. These price inflations exist *before* VAT is applied. Even if they didn't, a 20% VAT tax on Microsoft's Visual Studio doesn't account for a 50% inflation. I agree with you that these costs exist because they used to be the case, but what used to be a legitimate accounting for expenditures isn't true anymore.

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I've always known they did this kind of thing. With all of these companies know for their exorbitant prices, I figured someone would have noticed. Guess it just takes the resources of a government to actually acknowledge them and do something about them. There was a reason why I never bought an OS from Microsoft until i got into college, or even thought of buying anything Apple or Adobe.

Also the fact that they are pushing all this onto foreign markets is bullshit. ESPECIALLY the digital media, as there is nothing to package and ship, so now extra surcharges or tariffs are added in. This "bottom dollar" bullshit needs to stop...  As an American, I am REALLY tired of how corporations like these think they can dictate what certain countries ,or people in those countries pay for certain things.  I never thought you could see stereotyping or something close to racism in the marketplace or electronics, but these guys have been trending that way according to the information the Australian government obtained :S

Our government needs to enforce these "checks and balances" our forefathers put down into the constitution before it all gets too out of hand to where we can't do anything about :S

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That's why i use online PROXY's, CJ-keys and the likes and Torrents occasionally because it is just BS. I would never buy another Album or DVD in this country again unless ti was on special for $10. Games i but from CJ-keys or again use a online proxy to pay for it as if i was in the states myself. Screw them that's what i think. More sales in quantities and not higher prices, This is how so many small businesses shut down by raising prices. I just wish all fellow Aussies were as smart as I am in this case because that would purely make them change there ways and make it better for all consumers here in AUS. PM me if you wish to know more on how to buy online at the prices America Pays e.t.c

Happy Hunting

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d3fcon, it's actually only steam that does that crap, go with EA and all you need is to proxy into the store, everything else is proxy free, even activation! Microsoft and Adobe products also have the same thing, purchase location IP determines the price

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Everyone is struggling around the world and the fat cats of the big companies keep getting fatter.

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These companies have no justified reason for this...its purely greed and they have gotten away with it too long. I don't know what happened to just being decent to other human beings...not trying to screw them over so you can buy another BMW.

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While a lot of people are saying there's no justification, they are dead wrong.

1) These companies have nearly zero costs associated with creating the products in Australia that can be used in calculating taxes.

2) The sales tax is included in prices, so 10% is right there.

3) The companies make only profit within the country (relatively speaking), of which 30% go to the government for doing nothing but complain.

4) The two above contribute 40% to price increases.

5) The exchange rate adds another 10%.

The cost to the company ends up at about 50% more without including complying with censorship regulations, so 40-60% higher prices on software is entirely justifiable when companies just sell IP in a country rather than products.

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"3) The companies make only profit within the country (relatively speaking), of which 30% go to the government for doing nothing but complain."

Excuse me?

I don't see the government's arbitrary 30% cut. That's what the sales tax is for. Furthermore, that's not what Adobe, Microsoft, or Apple testified. In point of fact, when asked why Adobe should charge 50-70% more for products it delivered digitally, the company's response was : "Uh. Creative Cloud is a great value!"

Not "Your taxes make this a requirement." Not "We make the same margin." No, when *invited* to explain where the costs came from, not one company representative did so.

Nice try, troll.

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Joel, looks like you failed at your argument and simply resorted to elementary school name calling. The government gets an arbitrarily high 30% INCOME TAX on all gains within the country. As you know, companies generally have to pay taxes in countries where they do business based on income gained in that country. In the case of software companies, their COSTS ARE NOT IN THE COUNTRY, rather just a few marketing related expenses and maybe the cost of hosting. Whereas these companies can deduct very large (often more than revenue) within the US and pay practically no taxes, unproductive places like Australia have large corporate income tax (30%) and no large expenses (which are in the USA and a few other countries). The Australian government gets a 30% cut of the sales (from income) in addition to 10% from sales tax, and that's just ridiculous.

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Good to see the Australian government taking these so-called «geo-blocking» practices on ! One of the few things that the European Commission does that is worthwhile is keeping an eye on such practices within the EU, which, with a population of over 500 millions, is a market too large for companies to contemplate losing. Whether Australia, with a population of around 22 millions, is going to succeed in putting a stop to these tactics is another matter, but it's certainly worth having a go !...

Henri

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I can't speak for Australia, but I lived in Scotland during part of the 80's and 90's. Almost everything over there cost more than in the United States. Books, software, magazines, food, etc. It didn't matter whether it was produced locally or not, it was still more expensive. As for software, local software cost just as much as the imports. They were all expensive.

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And I thought I wanted to go to Australia, screw that noise!

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