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Aussie Parliamentary Inquiry Into Software Pricing Announced 259

New submitter elphie007 writes "Australian consumers may finally see the end of being overcharged for software simply because they live outside the U.S. Minister for Communications Senator Stephen Conroy (champion of Australia's National Broadband Network) is reported to be finalizing the terms of reference for a parliamentary inquiry into software pricing in Australia. Last week, Adobe announced Australians would be charged up to $1,600 more for Adobe CS6. With the ongoing strength of the Aussie dollar against the U.S. dollar, Australians should really be paying less, not more for software & music purchased online."
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Aussie Parliamentary Inquiry Into Software Pricing Announced

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  • To be fair (Score:5, Funny)

    by symbolset (646467) * on Saturday April 28, 2012 @11:27PM (#39835261) Journal
    Translating text and manuals to Australian isn't free.
    • by Netshroud (1856624) on Saturday April 28, 2012 @11:28PM (#39835275)
      All you have to do is script 180 degree rotation on every page.
    • by fostware (551290) on Sunday April 29, 2012 @12:08AM (#39835469) Homepage

      Just rename the UK English...

      It's not like the US doesn't know Engli...


  • Better beaches (Score:4, Interesting)

    by rjames13 (1178191) on Saturday April 28, 2012 @11:27PM (#39835267)
    If we lose the better beaches tax does that mean that New Zealand has better beaches than us?
  • Devils Advocate (Score:5, Informative)

    by Kawahee (901497) on Saturday April 28, 2012 @11:38PM (#39835329) Homepage Journal

    I went to purchase Diablo III from Blizzard's online store, and after signing in to my Australian (or SEA or whatever region) account the price went from US$Price to AU$(Price+20).

    I tried to play devils advocate on this one, and what I came up with is that bandwidth and rackspace in Australia are much more expensive than other parts of the world.

    But I get the feeling Blizzard don't have servers in Australia, and since most of their content delivery comes through Bittorrent (and who cares if they "seed" it themselves from the US with cheap bandwidth or AU), so I don't know why it costs so much more.

    • by sg_oneill (159032) on Sunday April 29, 2012 @03:16AM (#39836043)

      Rackspace is more expensive, for sure. But We're talking a few extra cents, not $20 , for a game.

      Largely the costs in hosting in australia are not bandwidth related (although some colos do charge stupidly for that) but power related. Because of the ridiculous price in power lately due to all the grid updates (no its not carbon price, that hasnt been introduced yet!) power is just stupidly expensive and that translates to expensiveness in rack hosting since a 1U rack can chew up quite a good few amperes of power and then some more for air conditioning (which is a huge part of rack hosting costs).

      So generally when your getting your stuff priced in rack hosting , at least in supply-your-own-box stuff the biggest component of the billing has a tendency to be power related.

      I cant wait for the NBN to be fully cranking so I can just host my box at home on my own 100m/b fibre with some grey-box diy server.

      Either way though, I dont think that really is what the costs are. CDs + DVDs are also ridiculously priced despite usually being manufactured overseas in cheap asian pressing plants, and bandwidth/hosting has nothing to contribute to THAT cost.

      • by dbIII (701233) on Sunday April 29, 2012 @04:57AM (#39836359)

        Because of the ridiculous price in power lately due to all the grid updates

        That's the story, but when the profit announcements come out each year you'll see it's due to the "profit updates" instead.
        For those outside of Australia, the truly insane thing we did is copied our electricity trading system wholesale from California at the height of the Enron debacle. It is operating as designed with rising prices for the consumer and crumbling infrastructure - but mostly fatter and fatter profits each year in a monopoly situation.

    • Re:Devils Advocate (Score:4, Interesting)

      by dbIII (701233) on Sunday April 29, 2012 @04:50AM (#39836349)

      and what I came up with is that bandwidth and rackspace in Australia are much more expensive than other parts of the world

      Which is unfortunately irrelevant because Blizzards "Oceanic" servers are all in racks in the USA.

      But I get the feeling Blizzard don't have servers in Australia

      There's been articles about the servers being in the USA, (can't remember where and the first page of google only shows complaints on forums), but either way a quick ping will show you that wherever they are there is half a world's length of wire and fibre between your net connection in Australia and where their servers are.

      However Blizzard are just one of many that is price gouging by location. Apple used to be so bad at it that people could fly from Sydney to Hawaii to buy a laptop, spend a weeks holiday, fly back, and still have change left over from what they would have paid to buy it locally. That may be hardware with real shipping costs but the real shipping costs would be a tiny percentage of the markup.

  • by Crypto Gnome (651401) on Saturday April 28, 2012 @11:45PM (#39835349) Homepage Journal
    I can accept the argument that it costs more to deliver a digital-download to "the rest of the internet" vs The US of A (due to many and various special deals cut by content providers) but not that much more. Especially for something like a song/album/movie or whatever where there is literally zero customisation for the geography or nationality of the end-consumer.

    The worst part is that this pricing disparity is heaping insult upon injury.

    Not only do we pay more than US based customers, but our downloads are often objectionably slow due to the inherent lesser throughput as a result of US based content hosting.

    Seriously folks, when are you going to MAN UP and host some servers in Down Under Land? The NBN is coming, end-customers will have 100Mbps links, and you will NOT BE ABLE TO PROPERLY SERVE THEM.
  • by 23940823908235908 (940365) on Saturday April 28, 2012 @11:45PM (#39835355)

    We Australians pay high prices for a simple reason - our market can bear the prices. The strong Australian dollar coincides with higher wages and costs of living, and any professional who needs photoshop will buy it, albeit begrudgingly. Adobe provides discounts for students and other groups, but the prices are still quite high.

    This is basic economics: charge as much as possible to each customer, also known as price discrimination [].

    The same goes for "luxury" cars. Let me give an example. Here in Australia a new BMW M3's recommended retail price is $154,000 AUD. In the US, it is around $60,000 USD. Government taxes, extras, shipping costs, etc only account for a very small percentage of this difference. How does BMW sell any cars in Australia? Enough people are willing and able to pay the price.

    • by LordLucless (582312) on Saturday April 28, 2012 @11:55PM (#39835417)

      How does BMW sell any cars in Australia?

      Because importing a BMW from the US is a pain in the butt; not to mention, the car would then have left-hand drive, which Australian customers are unsued to. On the other hand, routing a download from the US, or spoofing an online service into thinking you're buying from the US is trivial.

      Also, you can't torrent a BMW.

    • by jonwil (467024) on Sunday April 29, 2012 @12:30AM (#39835553)

      Your BMW example isn't the best example as that BMW M3 will have both import tariffs and fees (designed to protect what is left of the local car manufacturing industry) and luxury car tax (introduced by the Howard government in order to ensure the difference in the tax rate between luxury cars and normal cars remained the same under the GST as it did under the old wholesale sales tax system)

      Lets look at a better example:
      Take the LEGO Star Wars Super Star Destroyer. In the US you can buy one for US$399.99. To buy one in Australia you would need to pay AU$699.99.
      Thats $300 more here in Australia than it is in the US. Is it any wonder more Aussies are importing everything from toys to books to car tires from overseas?

      • by bertok (226922) on Sunday April 29, 2012 @02:05AM (#39835865)

        It's not just the tariffs or the taxes. How do you explain that even cars made locally in Australia cost more than the same model in New Zealand? They have shipping costs, taxes, and tariffs too, yet a locally made car somehow costs more here!

        I just found an informative page [] for importing a car into Australia. It has a worked example for importing a car worth $56K into Australia. The total payable tax plus tariffs is $11.5K. Doesn't exactly account for a BMW going from $60K to over $130K, does it? Where the hell did the other $60K increase in the price come from?

        I once worked as an IT contractor for a car importer that had an exclusive deal with a manufacturer to import cars into Australia. I asked one of their senior staffers why cars were more expensive in Australia. He basically admitted that all of the importers jack up the price because they have an effective monopoly position (for their brands), and can get away with it. There's a sort of gentleman's agreement between them to maintain this status quo and not compete on price. This works because importers often import several brands, so there's only a few of them catering for the entire market. It's not the taxes, the shipping, the retailers, or the manufacturer. Nameless middle-men obtain exclusive rights to import, and then milk the market for everything that they can.

        It's blatantly obvious if you know what to look for. For example, I wanted to get a nice sporty car, like the Nissan GT-R. Here in Australia, it's over double the cost of what it is in Japan or in the US. I worked out all the taxes, and it still didn't explain most of the difference. I looked into importing one direct from Japan -- I'd still have to pay all of the Australian taxes and tariffs and pay an additinal overhead for organising the whole thing, but the end result would still about 30-40% cheaper. However, it turns out that I wouldn't be be able to get my imported car serviced! The "official" importer also controls all of the parts and servicing, and they'll refuse to do business with you if you own a "grey" import. You can have it serviced elsewhere, but with a small-volume model like the GT-R, it's a risk. Compare that to, say, buying an iPad in America. Apple will repair it for you in Australia happily.

        There's no way to do the equivalent in America because the market is too big, there's too many importers, and hence there's enough competition to prevent a successful collusion from forming.

        This is why I don't buy anything except food and clothes from local retailers any more. I get all my gadgets and software online. Lots of other Australians shop online from overseas too. It's probably harming our local businesses, but fuck them and their greedy price gouging.

        It's about time the ACCC started investigating this. First software, then I hope they look into cars next...

        • by MoonBuggy (611105) on Sunday April 29, 2012 @05:45AM (#39836481) Journal

          If what you just said is accurate, what I just heard was "Start a luxury car importer, undercut the competition by 15%, profit!".

          • by gl4ss (559668) on Sunday April 29, 2012 @07:04AM (#39836685) Homepage Journal

            I think you missed the part where car import deals are dealt exclusively and unofficials are treated with hostility by the official service chain.

            sure, you could source your cars from uncooperative overseas dealers I suppose, but it's a big hassle. and then the troubles of not being able to use their trademarks in marketing material etc.. who buys discount luxury cars anyways? if they do then they buy them used. and I'm pretty sure australia has couple of businesses bringing used luxury cars from japan.

          • by rssc (898025) on Sunday April 29, 2012 @07:30AM (#39836783)
            If only it were that simple. I know of a similar situation in Europe, where a car dealer in country A had the same idea, and started buying cars from car dealers from country B just across the border (where they were significantly cheaper) and sold them locally with a significant discount. What then happend was that the car manufacturers threatened to stop selling cars to any car dealer in country B who sold cars to the car dealer from country A. I am not even sure how you could go after car manufacturers legally, considering that this is happening in a different country.
      • Your BMW example isn't the best example as that BMW M3 will have both import tariffs and fees (designed to protect what is left of the local car manufacturing industry) and luxury car tax (introduced by the Howard government in order to ensure the difference in the tax rate between luxury cars and normal cars remained the same under the GST as it did under the old wholesale sales tax system)

        No, the LCT doesn't even come close to explaining the price difference.

        It's just flat-out gouging by BMW (Mercedes, Audi and the super-expensive brands like Ferrari, etc, do the same).

        Some Euro brands do not do this - for example, Volkswagen. Their cars cost basically the same in Australia as they do in the UK. I believe Volvo are also quite competitively priced in Australia, but since they don't have any vehicles I'm interested in I don't know any specific examples.

        You are mad to buy any of the luxury Euro brands in Australia - BMW, Audi, Mercedes, et al. They're just reaming you with 20-150%+ markups over other countries.

      • by thegarbz (1787294) on Sunday April 29, 2012 @08:08AM (#39836879)

        Your BMW example isn't the best example as that BMW M3 will have both import tariffs and fees (designed to protect what is left of the local car manufacturing industry) and luxury car tax (introduced by the Howard government in order to ensure the difference in the tax rate between luxury cars and normal cars remained the same under the GST as it did under the old wholesale sales tax system)

        Funny one of our work mates went and imported 5 BMWs. Kept one, sold the other 4, and the proceeds basically paid for the one he kept. Sure it was a major amount of paperwork and hassle to get it done, but he effectively ended up with $60k profit as a result.

    • by outsider007 (115534) on Sunday April 29, 2012 @12:39AM (#39835599)

      According to wikipedia [] US per capita income is well above AU, being topped only by Norway and a few city states.

    • by Antonovich (1354565) on Sunday April 29, 2012 @05:34AM (#39836447)
      This is very similar to what was happening in France with mobile network charges. You LITERALLY had a spokesman from one of the three "historical operators" (incumbents, those who actually own physical networks as opposed to virtual operators) say when challenged by a journalist on the margins they were getting - "it's not how much it costs us to provide the service but what the consumer is prepared to pay". Needless to say, the three have been fined many hundreds of millions of euros for price collusion over the years. The result? They paid the fines - it was still far more profitable to pay the fines and continue to charge extortive prices. Then earlier this year the famous "fourth operator" arrived ( Overnight they revolutionised the market. People routinely have had their bills halved, or at least have a significant reduction in cost and significant increase in services provided/included (like free tethering, 3x data, unlimited voice, etc. thrown in,). The business model is different - you buy your phone outright (though they do offer rent-to-own which makes the difference pretty small) and there are no minimum contract lengths. There is basically no customer service but the difference here in France between "full customer service" and "no customer service" is pretty small anyway (don't get me started!). All the others have followed suit. The comment made by the CEO of the 4th operator "even at these prices we are still making a very healthy margin". The ONLY thing that matters is proper competition. Whether that happens naturally by a company being prepared to make only reasonable profits (as opposed to ridiculous) or by the government making sure it happens is probably pretty irrelevant. Software is a hard one though - most people are zombies and just use what is fashionable (Windows anyone?)...
  • Good (Score:4, Insightful)

    by sapphire wyvern (1153271) on Saturday April 28, 2012 @11:48PM (#39835367)

    Excellent. I'm sick of the exploitation of software pricing in Australia. Price ratios haven't shifted at all since the 90s when the AUD was worth 0.6 USD. Now 1 AUD > 1 USD.

  • There seems to be a duty on "luxury" items or something. An inflatable camping mattress that would have been less than USD$30 was AUD$130, and other prices in the camping store were similarly crazy. If you're outfitting as a camper there, you can probably save by flying to the U.S. to buy your stuff.
    • by mjwx (966435) on Sunday April 29, 2012 @12:47AM (#39835629)

      There seems to be a duty on "luxury" items or something. An inflatable camping mattress that would have been less than USD$30 was AUD$130, and other prices in the camping store were similarly crazy. If you're outfitting as a camper there, you can probably save by flying to the U.S. to buy your stuff.

      No duties on most items, Almost everything that is not alcohol, tobacco or has a motor has GST only (Goods and Services Tax, a flat 10%). Camping gear is no exception, no special duties on it what so ever.

      It's distributors profiteering. With tax, a $30 item in the US should cost $33, maybe you could stretch that to $40 with shipping. Yet Distributors price it at a 100% or greater mark up compared to the US prices.

      BTW, smart Australians are already buying from overseas. Shoes, clothing, computers, electronics games and movies are cheaper to buy overseas (via the internet) and import. Items under A$1000 can be imported GST free. This is something the retail dinosaurs in Australia hate as it means people aren't paying 3-5x for the same products as much in their stores, they've gone as far as suggesting a special Internet tax to try to drive up prices online.

      • With tax, a $30 item in the US should cost $33, maybe you could stretch that to $40 with shipping.

        It's not shipping you need to account for (most of this stuff is going to be coming from Asia anyway, so shipping to Australia should be cheaper), it's the higher wages and better working conditions in Australia, and the insane rents vendors have to pay thanks to our world-leading real estate bubble (last time I checked, Sydney had the most expensive commercial real estate *in the world*, beating out places like London, Paris, Zurich, New York and Tokyo - how crazy is that ?).

        (Side note: when this finally pops - and the consequent economic catastrophe has passed - the reduction in rents should go a long way towards normalising prices).

        Personally, I'm prepared to pay up to about 15-20% premium to support the local economy and living standards (in as much as buying imported goods from local vendors can do that). However, the problem is that prices here aren't 15-20% higher, they're 50-100% higher.

    • by cheekyboy (598084) on Sunday April 29, 2012 @12:50AM (#39835647) Homepage Journal

      If its high priced, blame the high rents shop have to pay, because of the greed of bankers ironically lending more $ , driving up realestate prices.

      btw, they are $30 in au, check here []

  • by QuasiSteve (2042606) on Sunday April 29, 2012 @12:13AM (#39835483)

    There used to be a great document at [] that detailed the situation in 2007 for the UK. Thankfully, there's []

    Adobe even replied to some inquiries, and you can see some of their excuses in: []

    The UK, just as Australia and Europe, were - and still are (at one point it was even cheaper to get the boxed version than to get the download version) - basically being screwed over (and good luck checking that - their various international websites make it a pain in the ass to compare pricing) and the only reason for this is that the market will pay anyway.
    Why? Because 1. It's Adobe's products. If you have an interest in them, you're probably in an industry where you have little choice, so you'd probably pay twice the price and limit yourself to some grumbling on twitter, and 2. you probably earn the price of these products back on just a handful of jobs, after which you'd only have to worry about the upgrade pricing.

    It's one market I wouldn't mind Apple upsetting, not one bit.

  • by whoever57 (658626) on Sunday April 29, 2012 @12:23AM (#39835525) Journal

    ... is that the market will bear it. All the claims about increased cost are bogus: the non-US sales are delta sales of software.

    Software has a fixed developement cost (plus the localization), so if cost were the issue, customers in non-US locations should ONLY pay for the delta cost to develop the local version.

  • by cheekyboy (598084) on Sunday April 29, 2012 @12:29AM (#39835543) Homepage Journal

    Comon now, you can sell stuff cheap in singapore, or to mexico, or to canada, but let it pass through one middle mad on its way to australia and that FAT asshole prick will bump up the prices 30%. Its like USA is so advanced , but asking it to ship products outside USA zones is like asking them to ship to mars or something. Yet UK/europe/asia, they can ship anywhere TWICE as quick. Why is it stuff from UK arrives in 1/3rd the time than USA stuff? Is it the DHS scanning 50 planes/hr ?

    And adobe, screw your resellers, just sell your shit 100% online.

    Resellers OFFER NOTHING in the internet world, sure in 1990 they did advertise and offer support, today none.

    • by ceoyoyo (59147) on Sunday April 29, 2012 @08:30AM (#39836953)

      You're not alone. Americans can't figure out how to ship things anywhere outside the country. Half an hour from the border in Canada might as well be the moon as far as most American companies are concerned. Of course, they might have a point - last time a friend in the US tried to send me something via the US postal service it got returned, address unknown. The address was correct, it just had "Canada" in it.

  • by fuzzyfuzzyfungus (1223518) on Sunday April 29, 2012 @12:30AM (#39835559) Journal
    Instead of this ad-hoc 'inquiry' nonsense, which is necessarily reactive and highly liable to regulatory capture, why don't we just adopt some of that 'free trade' stuff that assorted Respectable People tell us is so salubrious when the chaps who produce the products in question are shopping around for the cheapest inputs?

    Absent legal barriers, arbitrage in software should cost next to nothing, especially now that much of it doesn't even come on shiny disks anymore. See to it that Australian customers can legally import goods from the location of their choice, and that middlemen can import goods from the location of their choice for domestic sale, and the price difference should collapse in a loud puff of nebulous whining about 'intellectual property'...

    The whole notion behind the term 'grey market' is pernicious. It Should Not Matter whether the manufacturer/seller of a good is pleased by the ultimate destination of the goods they are selling. Yes, we would all like to enjoy perfect price discrimination. No, that isn't a good argument for letting us do so. In the absence of absurd restrictions on arbitrage, various pricing shenanigans, release-date bullshit, and other nonsense simply collapse.

    Such restrictions would be one thing if they were applied evenhandedly, if the producers weren't already shopping all over the world for the lowest prices, laxest laws, and sweetest tax breaks; but they are not. You want cozy protectionism for your retail prices? Well, perhaps you shouldn't expect to enjoy worldwide free trade on your input prices... You want worldwide free trade for the things you buy? Well, that's nice, you deserve no less than worldwide free trade in the things you sell.
    • by ceoyoyo (59147) on Sunday April 29, 2012 @08:33AM (#39836971)

      "why don't we just adopt some of that 'free trade' stuff"

      Canada has had free trade with the US for more than a decade. There's a picture in one of our history books of my grandfather protesting against it. It only applies to corporations. Individuals still get to pay duty, and the corporations aren't likely to pass on any of the savings.

  • by Pecisk (688001) on Sunday April 29, 2012 @12:47AM (#39835633)

    I wonder how do you push vendors and resellers to set price government and voting nation would like in capitalism. Because, it's like, unless it's monopoly (and CS can be replaced with other software for some cases), they can do whatever they want and *you* have rights to ignore them, too. Come on, where's the problem?

    Or current regime is not capitalism, but some kind of twisted "we all do right thing unless we doesn't like the outcome" in all cases (there are valid reasons when gov. have rights to say "stop", but this is not one of them).

  • Already I can see a few uninformed individuals making giant assumptions or just outright "ooh crybabies!" posts. This issue is just one an aspect of the maelstrom of distributors vs retailers vs customers in Australia.

    If you don't live here (in Australia) and think Australians should be charged (quite often) upwards of twice the price for things.. Fuck off and die in a house fire. You're a bad person. Well, no, that's not exactly true, what you are is a dick with an opinion (that is wrong). Please educate yourself or die in a house fire - your choice. Should I work twice as long so I can experience the same product as you? Obviously not. Prices should most definitely be sold with "economies of scale" in mind, yes. Do you have $90 US games? We do. Skyrim, for instance - and that's through digital distribution!

    The ultimate question is always this. Why can I have "some guy" on ebay in the UK ship me 1 single copy of a game through snail mail (expensive) to Australia and still end up paying 60% of the price of the game, locally. Why? how is that possible? It can only be possible because somewhere in the market we are getting fucked over. There is no other reason. If I can buy 1000 copies of a game, I can get a better price. SomeGuyInABedroomOnEbay98 can trump the entire Australian retail sector walking into a shop in the UK (and just so you know, the UK are also victims of this gauging) and paying for a SINGLE UNIT to be shipped to Australia.

    But, we're evolving. Even the previously unsavvy commoner is going online to get a better price - We're just buying stuff from people around the world, that realise they can exploit this gauging themselves. And thank (whoever) for them ! Thank you! Please, feel free to get on board. Ship the products bought locally to us! Meanwhile, the retailers are seeing diminishing sales, crying foul and attempting to have us taxed, so they can continue to exist without evolving.

    The key point in here is that there is always someone either gauging or offsetting their shitty distribution chain management onto the customer. A guy on ebay can beat them. Distributors and retailers will have to evolve. One of the mechanisms that will facilitate this is by mandating that prices in this country MUST be justifiably so.
  • by sugar and acid (88555) on Sunday April 29, 2012 @02:00AM (#39835853)

    In the end the only way to not get gouge in australia is to buy on the grey market from another country. Here instead of plowing through copyright laws by absolutely flouting them, you can bypass the arbitrary high price by going into the grey zone and buying from overseas resellers engage in arbitrage.

    These companies have to get realistic, the government is already taking a dim view on this so it is unlikely, and the fact you have to go grey market often means it might be easier just to pirate the whole damn thing.

    This is a massive competitiveness issue. Especially if it cost 2 times a seat to employ in world terms somebody in Australia than it does in the US just on software.

    Governments don't like arbitrary things like that, especially if they can outlaw them....

  • by flyingfsck (986395) on Sunday April 29, 2012 @03:15AM (#39836039)
    The Free software products are generally better and the price is right, so if Ausies pay more for Adobe products, then they have only themselves to blame.
  • by ivi (126837) on Sunday April 29, 2012 @03:18AM (#39836055)

    I found a list of songs priced (presumably for the buyer in USA) at $0.99 each

    When an Aussie went to buy some from within AU, prices jumped to $1.69 ea.

    Calculus taught me that lots of DeltaPennies add up to BigBigs, eg, for Apple,
    and I don't think it's fair to pay more outside USA than within, even for low-
    priced items, such as songs.

  • You reap what you sow.

    Just kidding, Bruce.

  • by Hognoxious (631665) on Sunday April 29, 2012 @05:09AM (#39836381) Homepage Journal

    Australian consumers may finally see the end of being overcharged for software simply because they live outside the U.S. Minister for Communications

    So, how much do people who live inside him pay?

  • by Registered Coward v2 (447531) on Sunday April 29, 2012 @07:04AM (#39836687)
    Sure, Aussies pay more because they will, and have the option to not buy a product if they don't like the costs. Conversely, should they be forced to pay higher prices if another US product costs more in the US than Australia? For example, should US companies be forced by US law to charge US prices for drugs to any buyer worldwide? Or, should Australian companies (or any any where for that matter) only be allowed to charge as much in their home market as they do in the US? Oddly enough, I can sometimes get products from Europe cheaper in the US than in Europe, adjusted for the exchange rate and VAT.

    It's easy to argue for lower prices but the same argument applies to raising them.

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