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
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.
Image credit: Daniel Dionne
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.