A national inquiry is beginning today into accusations that the international IT industry is ripping off Australian consumers.

The industry blames the cost of doing business in Australia, but consumer advocates reject that.

A House of Representatives inquiry is holding its first public hearing into the issue in Sydney today.

There are countless examples of electronic goods, software and entertainment products that cost more in Australia than overseas.

For example, an Arctic Monkeys album costs $17.99 on iTunes in Australia, but according to the Federal Department of Communications, it costs the equivalent of about $13 overseas.

The movie Toy Story costs $24.99 on iTunes in Australia, but buyers overseas pay only $10.

"In Australia you pay on average 52 per cent more than an American consumer for the same top 50 iTunes songs," said Choice's head of campaigns, Matt Levy.

He says Australian consumers should not have to pay so much more.

"We're talking about a product here which doesn't have the same sorts of overheads that industry often talk about in terms of rent, in terms of logistics and distribution," he added.

"It's the same file being downloaded more or less from the same server, but a 52 per cent price difference if you happen to be Australian."

A spokeswoman for Apple declined to comment on why movies and music are more expensive on iTunes in Australia.

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The company's Australian lobby group, the Australian Information Industry Association, says while downloadable software may have reduced transportation and manufacturing costs, other costs such as marketing, administration and advertising still remain.

The association's submission to the House of Representatives inquiry looking into the pricing of software, hardware and downloads blames the cost of doing business in Australia for the higher prices.

"Costs associated with product and service sales in Australia include GST, customs duty and regulatory requirements such as consumer guarantees which impose strict warranty requirements on suppliers and which add to business costs," said the association's chief executive Suzanne Campbell in a statement.

"Buyers in Australia have a much higher level of protection than consumers in many other markets and this protection has associated costs."

The Australian Retail Association's executive director Russell Zimmerman tells a similar story.

"We've probably seen some fairly strong price deflation in the hardware side of things but, still, we tend to think that our prices for even hardware are still high here in Australia and overseas," he said.

"I think there's a number of reasons. I think you've got to look through the supply chain, the supply chain costs are much greater here in Australia, and whether that starts from the warehousing costs through to delivery, through to retail rents or through a lot of other areas that are picking up pricing structures on the way through, those costs are much greater here in Australia than they are overseas."

'Price discrimination'

However, Choice rejects the assertion that there are higher costs unique to Australia that account for all the price difference.

"We think the most obvious reason and likely reason in fact for these price differences is international price discrimination, so that's actually the practice of the international businesses who manufacture these products who own the copyright actually charging more in the Australian market," Matt Levy argued.

"It certainly is their prerogative, but what we would say is that we've got an increasingly global marketplace and we have Australians who are able to access products online and actually see the sorts of price differences in a matter of seconds, whereas in the past there's been barriers if you like erected around our markets to actually, I guess, make this process less transparent."

He says business practices which make it hard for consumers to buy cheaper products from overseas should be stamped out.

"I think the practice we've seen for many years is that the international suppliers and manufacturers of these products have made it as hard as possible for Australian consumers to access them," he observed.

"We see things like technological measures, whether it's region coding or even IP address recognition, which often diverts Australians to the most expensive place to buy the exact same product.

"We don't think it's justified, we think the more pressure we can put on these businesses to actually stop these anti-competitive practices the better."

Apple and its rival Microsoft have refused to appear before the inquiry.