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Australia Businesses The Almighty Buck IT

Australian Government Releases Report Into IT Price Fixing 125

Posted by samzenpus
from the one-price-for-all dept.
elphie007 writes "Fourteen months after the Australian Parliament announced an inquiry into the disparity between IT pricing for Australian consumers, the Committee's final report has been published. The report highlights the importance of IT in Australia, and that Australian consumers are frequently shafted in an uncomfortable manner when it comes to purchasing IT goods and services. With recommendations ranging from the removal of parallel importation restrictions to the possible banning of geo-blocking services, could this mean the end of US bound Adobe shopping trips and the beginning of pricing equality for Australian IT consumers? More reports/analysis is available here and here."
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Australian Government Releases Report Into IT Price Fixing

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  • Those bytes won't ship themselves!

    • Re:Logistics (Score:5, Informative)

      by crafty.munchkin (1220528) on Monday July 29, 2013 @09:07AM (#44411339)
      Amusing, but it is absolutely ridiculous that if you want to buy 3 copies of Adobe Creative Suite in Australia, it's cheaper to fly to the US and buy them there, then fly straight back. And that's just one example, there's even the Steam Ripoffs [steamprices.com] site to show how much we get shafted for games.
      • It isn't that ridiculous. Capitalism is all about maximizing profit. If Australians are willing to pay 50% more for a product that could be had for less elsewhere, companies would be stupid to not charge 50% more. Australians are already used to this pricing mode thanks to idiotic import laws for physical goods, which is why Australians are so outraged that they grumble softly and continue to pay whatever is asked from them.

        Companies are smart.
        • Re: (Score:2, Insightful)

          by Anonymous Coward

          It isn't that ridiculous. Capitalism is all about maximizing profit.

          No, it is ridiculous and capitalism isn't all about maximizing profits. Capitalism relies heavily on competition, if there is no competition the system breaks down.
          In this case competition is hindered by copyright laws, an entity that thinks that they can distribute the software cheaper to Australia (Transport the bits for a cost that is marginal compared to the retail price in other regions.) is not allowed to do so.
          This is a prime example of when capitalism isn't allowed to work properly.

        • In a the magical free market the profits are meant to be squeezed down by healthy competition. In this case the only competition is importing from the USA, losing all consumer protections granted under Australian laws.

          As everyone here knows, there is no such thing as a free market. When there is a distribution network filled with exclusivity contracts that prevents parallel imports and DRM that makes your licensed software deactivate itself when they discover your an Aussie you can't call that a success of

          • by mi (197448)

            In this case the only competition is importing from the USA, losing all consumer protections granted under Australian laws.

            Perhaps, it is exactly this "consumer protection", that makes Australian consumers less profitable and/or more dangerous to the foreign software companies? Which reflects in the costs, of course...

            I don't know anything about those particular laws, but if there are provisions for multi-year warranties/guarantees, or triple money-back in certain cases, I'd understand the vendor wanting

        • by mjwx (966435)

          It isn't that ridiculous. Capitalism is all about maximizing profit.

          This part is correct.

          I'll fix the rest for you.

          If Australians can be forced to pay 50% more for a product that cant be purchased from anywhere but the supplier and their chosen distributor

          Thanks to US copyright treaties, we dont get a choice about software. We aren't willing to pay extra, we're forced to by the fact we have no alternative.

          But as predicted, this inquest was as powerful as a fart in a cyclone. Their recommendation was for businesses to attempt to circumvent GeoIP blocks, what business has time or the knoweledge to do that. Microsofts, Adobes, et al distribution channels are still protected and their prices are unaffected.

          Au

      • by smash (1351)
        And for those in the US who think "so what", have a look at our fucking airfare prices.
    • Re:Logistics (Score:4, Interesting)

      by Anonymous Coward on Monday July 29, 2013 @09:21AM (#44411457)

      Same thing with region-based DVDs and Blu-rays. Through the wonders of modern technology, the idea of "location" and "region" are mostly obsolete, at least as far as shipping and logistics is concerned -- especially for goods that are mostly information instead of physical things. But for all of the profit opportunities that this affords the powers-that-be, by its very nature this brave new logistics world also obsoletes certain profit centers that used to exist in the old system.

      So what do they do? Best of both! "You know, it no longer costs us more to actually get the things to you, which means that all of that extra money we charge the Aussies, which used to go to shipping and distribution costs, is pure profit for us!"

      Classical economics would say "the market will solve."

      Why hasn't it? (This is an honest question.)

      • by Anonymous Coward

        DVD and Blu-Ray regions are not about shipping and logistics. It's about protecting box office sales from people just importing a release before it makes it to theaters in that region.

        • by Anonymous Coward

          I think the same argument still applies, perhaps I just didn't paint a broad enough picture.

          It used to be very difficult to get the reels for a new movie from Hollywood to, say, India. Now it isn't. But they still want to pretend like it is, presumably for profit. They want the benefits of the a modern distribution system (i.e. it's really easy for them to move information around), but none of the "problems" (i.e. it's really easy for their customers to move information around).

          I guess I don't blame them, a

        • by sjames (1099)

          of course, they could just take advantage of that same simplified shipping and logistics to open the film at the same time everywhere. It's not like the old days when they had to actually make a new (expensive) print and ship it (bulky and heavy too).

      • by Anonymous Coward

        Classical economics would say "the market will solve."

        Why hasn't it? (This is an honest question.)

        Classical economics relies heavily on competition. Without competition there is no market forces that solves anything and there isn't even a theoretical benevolent entity that enforces fair prices so when you remove competition the free market system works even worse than planned in both theory and practice.

        In this case copyright and patents are used to remove the competition from the market. Copyright makes sure that no-one competes with the distribution and patents makes sure than no-one creates an equiva

        • Classical capitalism also relies heavily on open information. In this case Australian consumers don't know any better, although the study shows that's starting to change.

          It's interesting how consumers work. Rather than saying "That product is useful and for me it's worth $X", they will look at the cost to produce and say "That amount of profit is excessive, it should be less than $X". You can see this with digital copies of entertainment. The product is better for most people (more convenient and in a p

      • Re:Logistics (Score:5, Informative)

        by Arker (91948) on Monday July 29, 2013 @10:25AM (#44412027) Homepage

        Why has the market not solved it?

        Because there is no free market at work here. "Intellectual property law" prevents it.

      • by sjames (1099)

        It's interesting how much the corporate types support region coding schemes until someone wants to region code labor.

        The reason the problem isn't solved is because only a healthy market can solve those sorts of problems and we don't have those.

      • In a free market economics the consumer base as a whole dictates the price. How each customer reaches his or her price is extremely complicated. The margin is set off of this and products that can't produce a margin simply won't exist. The whole situation is a the fault of the Aussies being willing to spend more on software. They should simply stop buying software when they don't like the price. Of course this is assuming a free market.
  • Adding restrictions on imports deliberately removes Australia from global pricing from software and sets it up as a segmented market, so it's not a huge surprise that companies like Adobe then set prices within the segmented market differently, to optimize profits in that market.

    You'd probably see it in the U.S., too, if it were possible to have segmented pricing between states: Adobe would charge higher prices in CA and NY.

    • by Bluemar5 (2528418)
      Software was removed from parallel importing restrictions in the Copyright Amendment (Parallel Importation) Bill of 2001. It can't be used as an excuse to price gouge..
    • The addition of restrictions, stipulations, and additional regulations on government acquisitions (especially military) here in the States certainly inflates the price of any military-bound purchases. I don't see why additional restrictions from the Australian government on broader software imports would do anything but increase the end users' prices.

    • by Shavano (2541114)
      It is possible. US companies just don't do it that much for SW and computer hardware or other stuff that's easily shipped because the competition won't play ball. But when it comes to haircuts or movie tickets, location has a big effect on price.
    • by mjwx (966435) on Monday July 29, 2013 @11:22PM (#44419609)

      Adding restrictions on imports deliberately removes Australia from global pricing from software and sets it up as a segmented market

      What restrictions?

      Who modded this tripe up.

      Australia has no restrictions on importing software. This is why I can buy games in the UK and have them shipped over. This is why dropshippers exist, this is why I bought my camera from Hong Kong and had it shipped to Oz. The laws on restricting imports are only for very specific things like Alcohol, Tobacco and Food (Dutiable goods, prohibited goods and dangerous goods in legalese). Software is not dutiable, prohibited or dangerous, therefore not restricted.

      The problem is that the software distributors have segmented Australia. I cant get a copy of Windows from anyone else but Microsoft (Erm, a legit copy). MS chose to charge me 50% more, I didn't force MS to charge me more and we dont have a choice thanks to IP/Copyright laws that were foisted on us by a series of lop sided "free" trade agreements between Australia and the US.

  • the cause (Score:5, Funny)

    by slashmydots (2189826) on Monday July 29, 2013 @09:10AM (#44411379)
    It's obvious what the price difference is. It's really expensive for Adobe to have a support call center that's fluent in Australian.
  • by OzPeter (195038) on Monday July 29, 2013 @09:11AM (#44411383)

    Take that all you people that think Australia being founded by a bunch of criminals was a bad thing :P

    4 Copyright, circumvention, competition, and remedies

    Recommendation 4 The Committee recommends that the parallel importation restrictions still found in the Copyright Act 1968 (Cth) be lifted, and that the parallel importation defence in the Trade Marks Act 1995 (Cth) be reviewed and xiii broadened to ensure it is effective in allowing the importation of genuine goods.

    Recommendation 5 The Committee recommends that the Australian Government amend the Copyright Act’s section 10(1) anti-circumvention provisions to clarify and secure consumers’ rights to circumvent technological protection measures that control geographic market segmentation.

    Recommendation 6 The Committee further recommends that the Australian Government investigate options to educate Australian consumers and businesses as to:

    • * the extent to which they may circumvent geoblocking mechanisms in order to access cheaper legitimate goods;
    • * the tools and techniques which they may use to do so; and
    • *the way in which their rights under the Australian Consumer Law may be affected should they choose to do so.

    Recommendation 7 The Committee recommends that the Australian Government, in conjunction with relevant agencies, consider the creation of a ‘right of resale’ in relation to digitally distributed content, and clarification of ‘fair use’ rights for consumers, businesses, and educational institutions, including restrictions on vendors’ ability to ‘lock’ digital content into a particular ecosystem.

    Recommendation 8 The Committee recommends the repeal of section 51(3) of the Competition and Consumer Act 2010.

    Recommendation 9 The Committee recommends that the Australian Government consider enacting a ban on geoblocking as an option of last resort, should persistent market failure exist in spite of the changes to the Competition and Consumer Act and the Copyright Act recommended in this report.

    Recommendation 10 That the Australian Government investigate the feasibility of amending the Competition and Consumer Act so that contracts or terms of service which seek to enforce geoblocking are considered void.

  • by CastrTroy (595695) on Monday July 29, 2013 @09:14AM (#44411415) Homepage
    This happens in a lot of places, not just Australia. In Canada, Microsoft often charges more for licenses. However, if you try to order stuff through Amazon.com, they will say that they don't ship the item to Canada. Even though they will ship just about everything else, as long as you pay the shipping charges.
  • Steam (Score:5, Interesting)

    by shione (666388) on Monday July 29, 2013 @09:16AM (#44411423) Journal

    The banning of geo blocking would be a great step in the right direction. Stop companies from redirecting us to the Australian store when we specifically put in the url for the overseas counterpart for example steam. If I want to buy from steam US without using a vpn (which is against steam policy if I used a vpn) then I should be able to instead of being forced back to the Australian site. Steam saying that I have to buy from the aussie steam store because some games are banned or censored does not hold water when it is only not illegal for an australian to buy rc goods overseas for personal consumption. Prices differences between the US steam store and the Aussie one can be quite drastic too. Outlaw this too.

    Call of Duty 2
    Aussie steam store: $89.99
    US steam store in equivalent aussie dollars $19.99
    UK steam store in equivalent aussie dollars $30.72

    Civ V
    Aussie steam store: $69.99
    US steam store in equivalent aussie dollars $29.99
    UK steam store in equivalent aussie dollars $30.72

    Dishonoured
    Aussie steam store: $44.99
    US steam store in equivalent aussie dollars $29.99
    UK steam store in equivalent aussie dollars $23.04

    Dead Island Riptide
    Aussie steam store: $69.99
    US steam store in equivalent aussie dollars $39.99
    UK steam store in equivalent aussie dollars $53.78

    The Bureau: XCOM Declassified
    Aussie steam store: $71.99
    US steam store in equivalent aussie dollars $44.99
    UK steam store in equivalent aussie dollars $41.48

    • Isn't this because of one of the import restrictions essentially placing the final retail price in the hands of some Australian company, and it actually being illegal to sell for less than what they set the price at?

      That would explain the ripoff site's [steamprices.com] 'top list' looking to be mostly A rated games that have been price dropped/are on special. Steam is normally pretty agile on pricing.

      • by mjwx (966435)

        Isn't this because of one of the import restrictions essentially placing the final retail price in the hands of some Australian company, and it actually being illegal to sell for less than what they set the price at?

        OK, this myth needs to die.

        Testing, 1.. 2.. Testing, this is for the record.

        AUSTRALIA HAS NO RESTRICTIONS ON IMPORTING SOFTWARE.

        Sorry about the shouting, but this message needs to be made clear.

        Australian companies don't dictate prices to steam, that directive comes from higher up the chain. Publishers dictate prices to Steam and local distributors. It's the publishers who say Australians aren't permitted to pay the same as Americans or English.

        I can import games from the UK, Asia or the US.

        • by Firethorn (177587)

          I can import games from the UK, Asia or the US. In fact I regularly do

          Are you doing this as a consumer or as a retailer? Are you buying them for further distribution?

          It's the publishers who say Australians aren't permitted to pay the same as Americans or English.

          Are you sure that the publishers aren't being partially held over the barrel by distributer X in Australia who wants a larger than normal cut and a set of restrictive policies that result in the publisher raising the price rather than eating the costs? Policies that include 'All other distribution channels have to be at our price or higher'?

          A lot of indie games are purely electronic distributed, don't have a physical media distribution channel to worry about, and thus don't have to worry about distributer X.

          • by mjwx (966435)

            Are you doing this as a consumer or as a retailer? Are you buying them for further distribution?

            Retailers can do this. The problem is distributors are doing everything in their power to stop them. JB HiFi (an Australian electronics retailer) has been gray importing camera equipment for over a year now. When importing on that scale, you need to pay GST on the goods but that's it (GST is basically sales tax).

            Are you sure that the publishers aren't being partially held over the barrel by distributer X in Aus

            • by Firethorn (177587)

              Just trying to understand what the system is.

              If publishers were as routine about jacking up the prices in Europe and/or Canada, I'd understand more. As it seems to be mostly restricted to Australia, I can't help but think it's something unique about Australia. You understand?

  • by Anonymous Coward on Monday July 29, 2013 @09:44AM (#44411617)

    As an Australian citizen, I easily get around the price gouging attempts by American companies like Microsoft, Adobe and Apple.

    I do it by running Kubuntu on my laptop and desktop, and Android on my tablet and phone. My every single household IT need is thereby elegantly met for zero cost to me. LibreOffice 4.1 running under Kubuntu is great! Digikam is the bees knees for my digital photos! Krita is the best-of-breed for creating raster graphics art (Inkscape for vector graphics, Blender for 3D graphics). Clementine plays all my music just fine and syncs with my non-Apple media player, tablet and phone, and VLC shows my videos (of any format) with aplomb.

    I can buy *ALL* my hardware (phone, tablet, laptop and desktop, the latter two without any OS pre-installed) for less than the blowout cost of one package of commercial software from Microsoft or Adobe.

    • by Sockatume (732728)

      I'm sure you're very pleased with yourself, but if I'm reading this report right you got ripped off by about 50% on your hardware, and any music or videos you happened to pay actual money for.

    • by smash (1351)
      Wake me up when libreoffice can actually open and save documents properly. I've been waiting since 1997.
      • LibreOffice wasn't even a twinkle in a developer's eye in 1997, so I'm not sure what you're going on about.

        I happen to use LibreOffice every day at work without issue.
      • by deek (22697)

        Time to rise, sleepy-head.

        I use Libreoffice at work, regularly editing word and excel documents. You had me worried for a sec, thinking all my work over the last few years hadn't been saved properly. I checked, and thankfully, they're all good. Phew!

        • by smash (1351)
          How do you go with access databases?
          • by deek (22697)

            No idea. I very rarely deal with access databases, and then, only to set up/check ODBC entries for them.

  • A company can sell products at whatever price they want. At the end of the day, stuff costs more in Australia because people were willing to pay more. The companies are not doing anything illegal, they are selling software at the price the market is willing to pay.

    Australia is a pretty darn expensive country, so it isn't surprising things started out that way. Are costs ridiculous? Yes. But again, nothing illegal is going on here, so what does the government think it can do, or why do they think they have

    • by Firethorn (177587)

      A company can sell products at whatever price they want. At the end of the day, stuff costs more in Australia because people were willing to pay more. The companies are not doing anything illegal, they are selling software at the price the market is willing to pay.

      Actually, the Australian people's willingness to pay more comes with serious limitations. It appears that the spread of digital distribution and the resulting penetration into far more heads of the idea that *YES* Australian prices are a huge rip off has spurred this investigation.

      Australians *might* be willing to pay more, but not that much more, and it's been their very laws that help encourage it.
      Ways to help:
      1. End protection of importing companies
      2. End import tariffs and taxes
      3. Especially end the

      • by metrix007 (200091)

        For what it's worth, I am Australian.

        Merchandise in Australia is significantly more expensive than it is in many other countries, namely the US and Canada. Part of this is because of the low unemployment, better median salary

        • Consumer Prices in United States are 33.76% lower than in Australia
        • Consumer Prices Including Rent in United States are 36.51% lower than in Australia
        • Rent Prices in United States are 42.13% lower than in Australia
        • Restaurant Prices in United States are 34.18% lower than in Australia
        • Grocer
        • by Firethorn (177587)

          It's simply the price the market is willing to pay.

          Economics fail. You only get 'price the market is willing to pay' with monopolies. Which even with copyright isn't the case in the USA. In general, at least. It's complicated.

          Not when they're flying to the USA to pick up Adobe products and doing things like renting VPNs to pay US prices. Sure, the USA is about a third cheaper. On the other hand, software in Australia seems to run 100% more expensive.

          Are you really saying IBM software is more expensive in Aus because it has to be imported? When I could buy a copy online and have it shipped for cheaper?

          I think you didn't get what I was trying to say. I was trying to say that software tends to be more ex

          • by metrix007 (200091)

            Economics fail. You only get 'price the market is willing to pay' with monopolies.

            What in the world are you basing that on? It's a basic tenant of economics. You have something to sell, people will either pay the price or consider it too expensive and go without/find an alternative.

            Monopolies are only different because generally there is no choice but to pay the price.

            I think you didn't get what I was trying to say. I was trying to say that software tends to be more expensive in your country because of import restrictions.

            No, I got what you were saying, I just don't see it as relevant. IBM Australia doesn't need to import software from IBM USA, they can share the code and the development process. No importing needs to take place.

            If you think

            • by Firethorn (177587)

              What in the world are you basing that on? It's a basic tenant of economics. You have something to sell, people will either pay the price or consider it too expensive and go without/find an alternative.

              It's the 'find an alternative' part. If you're charging as much as you can and you're sufficiently over your costs a competitor will enter the market and undercut you.

              A monopoly changes the equation because 'find an alternate' isn't an option.

              As for IBM Australia, how many individual customers do they have today? IBM Australia is going to be selling software/services to businesses, not individuals, and the market there can be quite complicated.

              I'm thinking about companies like Microsoft, Blizzard, Square,

              • by metrix007 (200091)

                The thing is, the alternatives are not good enough, so they pay the price. If they didn't want to pay the price, they would settle for an inferior product and pay less. It's pretty simple.

                IBM was just an example....there's a Microsoft Australia, a Blizzard Australia etc as well.

        • by tlhIngan (30335)

          Consumer Prices in United States are 33.76% lower than in Australia
          Consumer Prices Including Rent in United States are 36.51% lower than in Australia
          Rent Prices in United States are 42.13% lower than in Australia
          Restaurant Prices in United States are 34.18% lower than in Australia
          Groceries Prices in United States are 28.26% lower than in Australia

          How did the prices get compared? In Australia, your taxes are built in, so when it sells for $60, you pay the store $60. In the US, when you pay $40, you play tax

    • by Anonymous Coward

      A sovereign government has the right to set whatever terms and conditions it chooses on any company that wants to operate in that country. It can change the law to make behaviour that is currently legal, illegal.

      If (for example) Australia wants to stipulate that no software must be sold at more than 10% over the US price (once taxes are accounted for), it is perfectly entitled to do so. The company in question then has the option to sell in Australia or not sell in Australia.

      You seem to be implying that Sov

      • by metrix007 (200091)

        Well, that would be funny to see that implemented. It would go to court, and such legislation would probably be dismissed.

    • by smash (1351)
      Piracy says no we aren't willing... government can do whatever the fuck they like within our local market.
    • by rtb61 (674572)

      No the are criminally exploiting government enforced monopolies which were meant to be for the benefit of the sciences and the arts, not to inflate profits. So it is a blatant abuse of the law, enforced against the interests of the public, laws basically brought into being as a result of corruption. Not just one thing being illegal but a series of things being illegal as they are criminal anti-competitive practices, abuse of free trade principles and do exclude the majority from equal access to trade oppor

    • by BennyE (213190)

      Am I allowed as a business to discriminate my pricing for a product based upon my customers race, sex or age in the US or Australia? No there are laws against that

      Am I legally allowed as a business to discriminate my pricing for a product based upon my knowledge of how much money is in that customers pocket?

      i.e. if I know customer A earns 100K a year and another customer B earns $50k a year can I legally sell Customer B a justin beiber CD for $10 but refuse to sell customer A the same CD unless they pay me

  • by Type44Q (1233630) on Monday July 29, 2013 @10:53AM (#44412347)

    are frequently shafted in an uncomfortable manner

    A little foreplay goes a long way... ;)

    • I find it disgusting that you've had that conversation with your mother!

      .....because everyone knows that no one on /. has a girlfriend! *ba-dum tsch*

      I'm here until Thursday. Be sure to try the parma with chips.

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