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Australian Govt Forces Apple, Adobe, Microsoft To Explain Price Hikes 371

Posted by timothy
from the what-the-market-will-bear dept.
An anonymous reader writes "Live outside the U.S.? Tired of paying huge local price markups on technology products from vendors such as Apple, Microsoft and Adobe? Well, rest easy, the Australian Government is on the case. After months of stonewalling from the vendors, today the Australian Parliament issued subpoenas compelling the three vendors to appear in public and take questions regarding their price hikes on technology products sold in Australia. Finally, we may have some answers for why Adobe, for example, charges up to $1,400 more for the full version of Creative Suite 6 when sold outside the U.S."
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Australian Govt Forces Apple, Adobe, Microsoft To Explain Price Hikes

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  • by Anonymous Coward on Monday February 11, 2013 @01:13AM (#42855843)

    Printing the instructions upside down costs money silly.

  • by Anonymous Coward on Monday February 11, 2013 @01:19AM (#42855867)

    "Why? Because fuck you. That's why."

    • by NFN_NLN (633283) on Monday February 11, 2013 @01:21AM (#42855879)

      Please mod +5 informative. This is the actual answer.

    • by Sarten-X (1102295)

      Notwithstanding any prior arrangement, agreement, or contract, being made verbally or in written form between the Company and the Customer, wherein the Customer is an occupant of or visitor to the country or continent of the Region, the Company shall have the exclusive right to establish and define the level of compensation required for the limited release of exclusive rights to the copying of the Product, to the maximum extent allowed by law, for any reason or none whatsoever. By accessing the Service prov

  • bad idea ? (Score:2, Insightful)

    by Anonymous Coward

    difference in pricing models like this encourages piracy.

    • uh. replying to undo mistaken negative comment

    • Piracy?

      Continued watering down of words. Grey markets perhaps. Not piracy.

      A real pirate would climb up an anchor rope and silently kill every person on the ship. Not unlike a ninja.

      Bunch of pansies living in their parents basement running torrent software. Pirates?

      • How do you know that's what he meant? I, for one, fully intend to join a ship's crew as soon as possible. Nothing gets results like holding yachters hostage.
        • Whoops; forgot the happy emoticon indicating insincerity.
        • by Lotana (842533)

          Why are you being such an underachiever?

          With your knowledge of virology, biology and access to equipment/facilities you should be able to hold an entire COUNTRY hostage.

          Always aim high. There is nothing motivation, drive and access to biological/chemical resources can't achieve!

    • Re:bad idea ? (Score:5, Interesting)

      by arth1 (260657) on Monday February 11, 2013 @01:55AM (#42856023) Homepage Journal

      difference in pricing models like this encourages piracy.

      True, and then companies will hike the prices up in the regions with high piracy rates to "compensate", which makes the piracy problem even worse, and you have an ever-escalating cycle.

      But the problem here is price fixing, using protectionist legislation as the method of artificially controlling the prices of products that have a near-monopoly in the market.
      The only real solution to this is to disallow region based controls, and turn the laws around so that it becomes illegal to restrict users based on geography.
      A free market is anti-competitive unless it's free for the buyer as well as the seller.

  • by Anonymous Coward on Monday February 11, 2013 @01:32AM (#42855915)

    Interestingly, one Australian company made the submission that it was cheaper to send an employee business class from Australia to the US to buy a certain piece of software there, stay for a night or two in a hotel, fly back, and pay import and/or GST at customs than it was to get the software locally.

    • by green1 (322787)

      Don't worry, that won't be the case for long, (and not in a good way) companies would love to make buying something outside your local authorized dealer illegal.

      • by Anonymous Coward on Monday February 11, 2013 @02:38AM (#42856225)

        Don't worry, that won't be the case for long, (and not in a good way) companies would love to make buying something outside your local authorized dealer illegal.

        It may not be illegal yet, but Adobe has already moved in that direction.

        Adobe closed off their international sales for several weeks while they reviewed their international pricing, right as we needed to bring on more people for a new project. After a few weeks of being told we'd be able to buy more licenses any day now, we sent someone to the US to buy a couple of retail copies so we could at least have new people doing more than just surfing the net. Within 24 hours of installing the US boxed copies we had Adobe on the phone demanding to know why our company was running pirated copies of their software, and threatening to revoke *all* of our licenses if we didn't remove them immediately. Turns out they consider running a US boxed copy in a foreign country as a breach of contract and will cut you off. Eventually they had to admit that we had been trying, continuously, to buy a copy from them, and agreed to let us continue until their online store reopened so we could replace the copies we were running.

        • by kthreadd (1558445)

          They agreed to let you run your legally purchased copies, for a while.

          Wow, god job Adobe.

        • by Alain Williams (2972) <addw@phcomp.co.uk> on Monday February 11, 2013 @05:26AM (#42856777) Homepage

          Ten years ago my parents bought me a video camera, they were on holiday in the USA. A few months later it broke. Panasonic UK refused to service it (even if I paid) claiming that it was not one of their products. Basically they were protecting their extra margin because these things were sold at a higher price in the UK than in the USA. This is short termed thinking - I will avoid buying from them ever again.

          Companies like globalisation - they make goods where it is cheapest and sell the same stuff at different prices everywhere. But if we, the consumer, try to do the same they stop it. There is an inbalance of power, large corporates abuse it. We like to think that we live in a free market, we do not.

    • It is cheaper to fly to the US for some IT week-long training courses, stay the week plus weekend than a similar course attended locally. Cheaper including accomadation, food and flights as my colleague at work has experienced. Maybe we are meant to see the price gouging as opportunities to see the world.
    • by mjwx (966435)

      Interestingly, one Australian company made the submission that it was cheaper to send an employee business class from Australia to the US to buy a certain piece of software there, stay for a night or two in a hotel, fly back, and pay import and/or GST at customs than it was to get the software locally.

      Been there, done that. Used to work for a GIS outfit with a small office in San Diego. Basically 2 guys working out of the spare room in one of their homes. If we wanted to buy some software and didn't need it right now, we'd get them to buy it and post us the box (this was back in 05 when sending 12 gigs was faster via airmail than Internet).

  • Smaller market = higher overheads

    There are still support, distribution costs and compliance costs associated with having a local operation - only a fully online model alleviates that and even then time zone issues imply potential for increased costs

    To some extent, digital distribution and limited local support brings these costs down - the perfect example is Apple whose products are now more or lineball with US markets thanks to digital distribution of software, useless tech support and enough volume to com

    • by balsy2001 (941953)
      I think you are right. I would also mention a couple of other reasons: 1) the difference could stem from the need to have extra personnel that work just on regulatory compliance for that country (depending on the business, there may even be ITAR export compliance issues). 2) There is also the currency conversion RISK. You have to price your product high enough above the normal fluctuations to ensure that you don't lose out on currency conversion (this is more than on a daily basis, think like quarterly
    • by bloodhawk (813939)
      Their are no local support costs, The companies mentioned use global support operations not local ones so support costs are actually identical to the US. Distribution is mostly digital and where it isn't the cost at worst is a couple of dollars to ship it to a store. A premium can definitely be justified, but it is not remotely possible to justify the premium currently being imposed as anything other than a FUCK YOU.
  • Because they can (Score:5, Informative)

    by onyxruby (118189) <onyxruby@[ ]cast.net ['com' in gap]> on Monday February 11, 2013 @01:42AM (#42855953)

    That is the only honest answer that there is. As long as artificial monopolies like 'regions' are tolerated it will only continue. There is no valid reason why software or other companies should be able to use globalism for cheaper labor whilst denying consumers globalism for cheaper products. I don't see how things are going to change until world governments start demanding better treatment though.

    Why are textbooks 1/10th the cost in Indonesia? Why couldn't I buy Top Gear in the US for years when it was available for cheap overseas in the discount bin? Why are Corvette's twice the price in Europe? The list goes on and the answer come back to artificial monopolies charging more because they can. Introduce competition, make grey market imports legal, demand manufacturers honor warranties regardless of the country of origin, allow people to buy software in any country regardless of where they live etc......

    • Re:Because they can (Score:5, Interesting)

      by Runaway1956 (1322357) on Monday February 11, 2013 @02:06AM (#42856079) Homepage Journal

      "That is the only honest answer that there is. As long as artificial monopolies like 'regions' are tolerated it will only continue. There is no valid reason why software or other companies should be able to use globalism for cheaper labor whilst denying consumers globalism for cheaper products."

      You might find this story interesting.

      I think it was 1992, Texas decided to build another prison, located in New Boston, Tx. A Pennsylvania company won the contract, and part of the contract covered employment of local workers. A journeyman carpenter was supposed to get $13.00 or $13.50/hr.

      When the company started hiring, they were paying $11.00/hr for journeymen craftsmen.

      This obviously violated the contract - but the Pennsylvania company went to court, and successfully argued that because they were working in an "economically depressed" area, that $11.00 was equivalent to the wages stated in the contract. That is, $11.00 in the Texarkana area was equal to the $13.00 or $13.50 in Pittsburgh, Pa.

      There is always some imaginary bullshit excuse for ripping off the locals.

    • by balsy2001 (941953)
      One reason why some things cost more in different countries has nothing to do with monopolies. TAXES levied by the country where the foreign product is sold. This is especially common for cars. In China, for example, there are serious taxes on any car imported into the county.
      • by dbIII (701233)
        In this case taxes were reduced by 15% but prices continued to increase, so the tax angle is very misleading to the point of outright dishonesty in this case.
        • by balsy2001 (941953)
          I was just trying to point out that the set of valid reasons for higher prices outside the country of origin isn't null. Doesn't mean that all reasons are good or that there is a reason other than they can.
  • by AbRASiON (589899) * on Monday February 11, 2013 @01:42AM (#42855955) Journal

    The next gen of consoles are going to screw us on digital sales, infact anyone selling movies / games / music digitally in general, I hate to go all tinfoil on you guys but they've proven time and time again, they simply do not care about foreigners.

    If you can charge bob 3$ for the icecream and mary 8$, then do it â" especially if you're the only place selling icecream now. Only bob is America and we're mary.

    To take it to 11 on the tinfoil mode, when things become all digital "they" will have control, full control. EA have already proven just how evil digital control is, go find a GOTY edition of Mass Effect 1 2 or 3. They don't exist. You think you're getting a bargain when you buy Mass Effect 2, a 50$ US PC game for 5$ on a Steam sale? Awesome! (Well you are, it's still good) but the DLC is on THEIR controlled internal store and it's ONLY on their store and do you think the DLC is marked down to 10 or 15% of the original cost like the full game? Ok what about 20%? or 30%? No. Not only is it extremely rarely marked down, when it is, it's a small amount (I think it's been on sale twice, in nearly 3 years)

    The console manufacturers are sadly GOING to region lock us when it's all digital and they WILL charge us more than Americans. Interestingly we probably wouldn't even notice or care if it was 20 years ago and we didn't have American buddies posting on the same forums or links to deals or reddit threads or whatever saying "holy crap, I just got a sweet God of War 4 deal on the PSN store for only 9.99" â" except we'll click the link "not available in your region" or "on special, this week only, 49$ AUD"

    Australians need to be prepared that this whole digital thing IS going to shoot us square in the wallet, then the face. I'd wager good money on this.
    Long story short, region free PS3 took me from being a dodgy pirate to someone really happy to purchase games, I'm happy to pay 20 to 50$ US a game, no qualms - hell the Americans do it, don't you? Except they frequently try to stiff us from 95 to 120$ US a shot,....... it's unreasonable, it's bullshit and unacceptable.

    Even worse is on digital stores online, they detect my IP and the price for a digital product of 1's and 0's is 30 to 100% more. It's _incredibly_ frustrating as almost any foreigner could tell you.
    Long story short? You think this is bad now? Just wait, soon there won't BE steam "gifting" from your American pals, there won't be a US PSN store to log in to with PSN credits you purchased on Amazon, there won't be stores which will ship you foreign region free games. There won't be a G2play where I can buy a cheap key of Diablo or Starcraft cheaper than the Blizzard online store or retail. Why would Blizzard, EA, Ubisoft provide these 3'rd party 'stores' keys to sell?

    Australians, in my opinion we're actually in the peak part of bargains right here, in 2011/2012/2013 and maybe 2014 - we've got fairly cheap international shipping, we're in the mid retail -> digital conversion so everyone is clamouring for our buck. Soon the loopholes will be closed, the infrastructure, policies, design all in place for a single store for companies and bam. Kiss the awesome times we've had goodbye.
    Finally, most stores won't do deals like Valve, they seem to be one of the few with respect for the customer, we're in for a bad time :/

    • Go to the store over Tor. Call it Tor roulette. You'll never know what price they are going to charge or where they will be willing to ship.

    • by balsy2001 (941953) on Monday February 11, 2013 @02:12AM (#42856113)
      You could stop buying the products. If enough people find the offenses of these companies egregious enough and stop purchasing the products they will change their behavior. You have to be willing to do without it though, not just pirate it, or they will blame the piracy as the reason they are losing business instead of their crappy model.
    • by arth1 (260657)

      If you can charge bob 3$ for the icecream

      Am I the only one old enough to go into mental arithmetic mode to figure out how much a shilling and three pence was in dollars?

      (About 10 cent, in case anyone wonders.)

  • I know why. (Score:5, Funny)

    by jafac (1449) on Monday February 11, 2013 @02:09AM (#42856101) Homepage

    . . . it's because they have to translate their product into a weird foreign language. Right?

    • by arth1 (260657)

      Surely that's a cost saver. Australian documentation can be condensed to "No worries, mate".

  • by Anonymous Coward

    It's not that non-US prices are higher, it is that US prices are made low. This is because Americans are cheap bastards even though many have lots of money to spend. It is a big market, but one you can only break into at discount prices. On the plus side, it is easier to offload low quality goods to the US. Many companies are learning fast and sending lower QA-scoring product runs to the US, sometime even seperate products for specific low-quality US chains like Walmart. However, if your products are n

  • Many products cost the US$-price in Euro here ... or even more in Euro than in US$ ... e.g., one of our customers complained about our price for a Fortinet device. They looked up the device on the Internet and found it on some supplier's page ... after converting the prices, it turned out that the street price in the US (including VAT but without state sales tax) was about more than 40% under our wholesale price (without VAT) according to the official price list (and we already get a pretty good rebate on t

  • It's not just Apple, MS, etc. either.

    We get ripped off on most things here. Rear tyres for my car - US price: $300/each. Local price? $900 each. Computer stuff is generally more expensive in terms of AU vs US dollars by a factor of 1.5 or more. Our dollar is currently above parity...

    Fuel is about $1.50 per litre. A coffee from a cafe is about $5. A subway 11" long sandwich is about $6-7.

    • Tyres at $900 each are obviously at the very premium/niche end of the market - either high-performance or unusual size (or both!) .. I have the same experience ... In fact, that is about as niche as you can get without trying to get Pirellis P-Zeros for your Gallardo (or equiv sports car scenario)

      Sad reality is they just don't sell enough to be economical but instead of not offering them at all, they make them reflective of the actual costs.

      Your typical Commodore/Falcon or small hatchback tyres are basicall

  • by PrimaryConsult (1546585) on Monday February 11, 2013 @02:43AM (#42856243)

    Simply don't enforce any copyright laws against these products until the pricing reaches parity. "Authorize" a local "distributor" to sell it at the cost of the blank media it is distributed on. Make sure businesses are aware that they can get in on this action too, and that any copy acquired in this manner will be free from any future prosecution of copyright infringement. If the companies don't play ball after that, Australia suddenly becomes a much cheaper place to set up a small business... win-win.

    • by balsy2001 (941953)
      I think you need to go through the WTO to do this above board. The islands in the Caribbean did this over on-line gambling the US unilaterally imposed and got permission to distribute US music without paying royalties as compensation.
  • Pretty simple really (Score:4, Informative)

    by Solandri (704621) on Monday February 11, 2013 @04:24AM (#42856547)
    Historically, the AUD has been worth about 0.75 USD [google.com] (click on 10 year). It wasn't until the global financial meltdown that the AUD shot up in value to where it surpassed parity with the USD (Australia's economy wasn't hurt as much because they didn't have a housing bubble at the time, though they have one now). If you compare before and after, the AUD increased in value by about 40% against the USD. If you compare the software prices, they too are about 40% higher. Surprise, surprise.

    When companies conduct business internationally, they usually negotiate a fixed exchange rate for a year (or a quarter). It helps insulate their annual financial planning from fluctuations in the currency markets. So when the AUD first shot up, the vendors importing US software still had to pay 1.3 AUD per 1.0 USD, even though 1.3 AUD was now worth closer to 1.4 USD. The next year when they went to negotiate currency exchange prices again, the US companies said "OMG! You want a 40% price cut? You can't be serious!" And the Australian vendors didn't have purchasing power to negotiate a better deal. So year after year they got shafted with prices based on pre-2007 exchange rates. (In the US companies' defense, they probably argued that if the AUD shot up 40% in a year, it could drop 40% the next year, and they weren't willing to take that big a risk and adjust the exchange rate by that large an amount. But it's unconscionable that it's continued for 5 years.)
  • by thogard (43403) on Monday February 11, 2013 @05:34AM (#42856815) Homepage

    The Aussie power plug is the most likely case for things to cost more. Anything that can be plugged in need a C-tick which is just like the FCC testing but it requires more paperwork and the standard is very slightly different. Other things have unique standards such as a kitchen faucet has to be certified to the local standard. Many of these standards are voluntary in the US under the UL approval process but are a legal requirement to follow an expensive, unique AS or ASNZ standard.
    Cars have to be crash tested for the local market.

    Local sales and support costs are far higher since local staff costs are much higher than in the US since minimum wage jobs there are often $20 to $30 an hour here. The cost of everything is higher so staff that can demand it, do want far more money. Construction costs are some of the highest in the world.

    Local inflation is driven by a requirement that 9% of all employees money gets dumped into mutual fund like retirement funds that are simply trying to out gamble everyone else and not really invest so they are throwing around money like crazy.

    The real issue is that land prices are hyper inflated and simply insane. The makers of Autocad have an office an hour drive away from down town sitting on land worth 10s of millions yet the same office in a almost rural area in a US city might cost nearly a million dollars. The land prices mean rent is very high and there are examples where the 2rd largest mall in town spent over a billion dollars to upgrade so basic economics say the rent of the smaller stores need to increase by at least $20,000 a month. The Costco built in Melbourne was the most expensive one in the world and far more expensive than the ones they have built in Tokyo.

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