IT pricing inquiry fails to impress

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Sorry, this video has expired Video: Experts not impressed by IT inquiry (The Business)

A parliamentary inquiry into IT pricing which heard testimonies from Apple, Microsoft and Adobe has failed to impress Australian experts.

Living in Australia can often mean paying up to 88 per cent more for some of the most common IT products.

The inequity led a parliamentary inquiry to take the unusual step last month of forcing some of world's biggest IT companies to front up and explain the price hikes.

The Australian parliamentary inquiry issued a threatening summons to the world's technology giants to demand they answer accusations of price gouging.

However, Dr Matthew Rimmer from the Australian National University (ANU) law school says their testimony failed to surprise or impress.

"I thought the inquiry hearing was like the theatre of the absurd," he said.

"The three companies put forward a range of justifications, defences, spin and evasion."

Each IT giant gave quite different reasons.

Microsoft said its current prices are set, and customers can vote with their wallets.

Adobe said it charges an extra $1,000 to download software in Australia because it offers a local, bespoke experience, while Apple blames local copyright holders for its iTunes prices, which are 50 per cent higher than in the United States.

The reasons given to the inquiry failed to impress Matt Levey, of the consumer organisation Choice.

"You're talking about a business that's as large as Apple saying essentially they don't have any influence over the price that an iTunes product appears in their store," he said.

Calls for action are focused on copyright law and geo-blocking, where a company uses measures like assessing a consumer's computer location, to ensure they cannot buy the same product more cheaply from the company's offshore website.

"The Australian Competition and Consumer Commission (ACCC) needs to be unchained," Dr Rimmer said.

"I think it's really important the ACCC have the power to investigate where there is anti-competitive conduct involving intellectual property."

Circumvention

Some Australians already circumvent the geo-blocks, but there are questions over the legality of the practice.

"This is exactly the sort of area we think the committee and the Government should be looking to give consumers the confidence to access legitimate, cheaper products," Dr Rimmer said.

Sydney Law School associate professor Kimberlee Weatherall says the Government would have to be cautious about how it amended legislation regarding circumvention.

"You would have to be careful because there are copyright restrictions in the Australia Free Trade Agreement with the US, but I think there are ways that you could draft an exclusion so that circumventing geo-blocking wouldn't be illegal," she said.

Whatever reforms are being considered, they are in the shadow of negotiations for a new trade agreement, the Trans-Pacific Partnership.

Perhaps publicising the extent of the pricing differences might operate to embarrass some of the US companies Kimberlee Weatherall

Leaks suggest the US wants to retain parallel importation restrictions and anti-circumvention laws.

Associate professor Weatherall says often when the government is negotiating a free trade agreement, their position is based on current law.

"So if they're thinking they might need to change that current law in order to allow consumers to access material, they would need to take that position into the negotiations," she said.

"It's raised discussion about the issue. Perhaps publicising the extent of the pricing differences might operate to embarrass some of the US companies."

Despite their reservations, critics of the global cyber giants agree the inquiry has been worthwhile.

"It actually compelled Apple, Microsoft and Adobe to give evidence which is something that's rarely done in the committee system in Australia," Choice's Matt Levey said.

"There's obviously a legitimate place for copyright ... but when that extends further to simply the exclusive rights of copyright owners we think that's when it raises issues for other consumers."

Topics: information-technology, information-and-communication, consumer-protection, consumer-electronics, internet-technology, science-and-technology, computers-and-technology, australia

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