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Australian IT Price Hike Inquiry Kicks Off: Submissions Wanted 70

Posted by timothy
from the show-us-what-part-of-your-wallet-they-touched dept.
New submitter wirelessduck writes "After some recent complaints from a Labor MP about price markups on software and technology devices in Australia, Federal Government agencies decided to look in to the matter and an official parliamentary inquiry into the issue was started. 'The Federal Parliament's inquiry into local price markups on technology goods and services has gotten under way, with the committee overseeing the initiative issuing its terms of reference and calling for submissions from the general public on the issue.'"
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Australian IT Price Hike Inquiry Kicks Off: Submissions Wanted

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  • Dear Australia... (Score:3, Insightful)

    by fuzzyfuzzyfungus (1223518) on Saturday May 26, 2012 @12:51AM (#40118435) Journal
    Because Kangaroos are pretty awesome(basically velociraptor sheep) I offer the following advice:

    Y'know why vendors price their goods absurdly high in Australia? Because they can.

    Y'know why they can? Because You, the government of Australia, let them.

    Allow free importation of goods from the US and other markets and watch the vendor premiums for your mysterious island continent collapse. If Australians could simply buy from Adobe US, It'd be pretty difficult for Adobe to maintain a price premium...

    Here endeth the lesson.
    • Re:Dear Australia... (Score:5, Informative)

      by LordLucless (582312) on Saturday May 26, 2012 @01:12AM (#40118551)

      At least a part of the problem is that Adobe US will not willingly sell to an Australian. Actually, I don't know about Adobe, but that's the general problem they're trying to address. Companies are getting their US distributors to agree not to sell to Australians as part of their distribution agreement, specifically to stop Australians from getting them from overseas.

    • Re:Dear Australia... (Score:5, Informative)

      by bds1986 (1268378) on Saturday May 26, 2012 @01:21AM (#40118593)

      Allow free importation of goods from the US and other markets and watch the vendor premiums for your mysterious island continent collapse. If Australians could simply buy from Adobe US, It'd be pretty difficult for Adobe to maintain a price premium...

      I hope this is intended to be sarcastic. Firstly, Australia already has a Free Trade Agreement with the United States [wikipedia.org]. Secondly, the reason I can't buy from Adobe US, or Steam US, or iTunes US, or Whatever US has nothing to do with the government, but that each of those respective entities won't let me purchase from them and will refuse to accept my Australian credit card and billing address. Why? So they can slug me a 200% markup on the Australian store, despite $1AUD frequently exceeding $1 USD. The massive marking up of digital products downloaded over the internet is not the fault of the government.

      Y'know why vendors price their goods absurdly high in Australia? Because they can.

      And because international retailers selling products to Australians online are colluding with domestic retailers to raise prices or eliminate online sales entirely [smh.com.au]. From that article:

      THERE are growing calls for Australia's competition watchdog to conduct an inquiry into local apparel distributors who are preventing overseas suppliers from selling their products to Australian consumers on international websites or instructing them to increase their web prices. The calls come after The Age last week revealed that a growing number of Australian fashion importers and wholesalers are reaching agreements with international brands to lift prices or cease shipping here.

      In Australia, retailers will frequently impose 300-400% markups on items found easily online. That is why an inquiry is needed.

      • by bug1 (96678)

        In Australia, retailers will frequently impose 300-400% markups on items found easily online.

        And said retails also complain when people buy stuff online.

      • The main reason: localization

        Do you know how rare it is to find somebody that understands both Australian and either US or UK English?

        • Do you know how rare it is to find somebody that understands both Australian and either US or UK English?

          'struth!

      • but that each of those respective entities won't let me purchase from them and will refuse to accept my Australian credit card and billing address.

        And not just that. With the dollar at parity I wanted to buy a Fender guitar, retail in US for $299, here $500+. Even with $100 freight it's still cheaper to buy in the US and ship here, however Fender US won't allow their dealers to ship outside the US, so I ended up using a shipping service in California. So buying from the retailer, shipping local to US, paying CA state taxes, then shipping international and paying international shipping and insurance I still managed to get it for under $500. The best example of us getting shafted is the Holden Monaro. Built in Australia, and sold to locals for $60k, it was then exported to the US as the Pontiac GTO and sold there for $30k.

    • Re:Dear Australia... (Score:4, Interesting)

      by mjwx (966435) on Saturday May 26, 2012 @01:43AM (#40118697)

      Allow free importation of goods from the US and other markets and watch the vendor premiums for your mysterious island continent collapse. If Australians could simply buy from Adobe US, It'd be pretty difficult for Adobe to maintain a price premium...

      Ummm...

      Parallel importation of software is perfectly legal. I buy all my games from Hong Kong or the UK. I can order Photoshop from B&H PhotoVideo in New York and they'll deliver it to me in BumFuck, Western Australia. Ooops, sorry, that's Perth, Western Australia.

      What I have a small problem with is the fact that I cant buy from Australian stores, who pay Australian taxes and support the Australian economy. The government has a very big problem with this.

      But my prediction is that the report will tell us what we already know, Aussies are getting ripped off, the distributors are gouging prices and they'll have a nice list of recommendations that'll never happen because if for no other reason, the opposition will stop it because it wasn't their idea.

      BTW, Kangaroo's aren't like Velociraptor Sheep, first they are bigger then a Velociraptor or a sheep. They are more like 6 ft tall bounding rocks because it looks like your car has hit a rock after running into one.

      • Sounds like a job for the ACCC to me, they have the independence and the teeth to tackle something like this, as you say the opposition are not going to want to help the government look useful. The US could benifit from a similar institution, particularly wrt to pharmecuticals.
        • by drsmithy (35869)

          Sounds like a job for the ACCC to me, they have the independence and the teeth to tackle something like this, as you say the opposition are not going to want to help the government look useful.

          After ten years of Liberals in Government, the ACCC is but a shadow of its former self.

          5 subsequent years of "New Labor" has (unsurprisingly) done little to remedy the situation.

      • by Meski (774546)
        a - Setup a US redirecting service
        b - Get an Aussie creditcard
        c - Set the billing address of b to a
        d - Setup a proxy


        Order software via d on c.

        Re the 'roos: I'd sooner hit the rock, it doesn't fight with you after it comes thru the windscreen.
    • You're commenting on the case with an arrogant uninformed attitude. Other posters who have replied have basically demolished your argument. What in the world made you assume Australia has government mandated import barriers towards overseas IT products? Its the exact opposite: market collusion amongst the big players to extract monopoly rents. Or are you suggesting Australia, er, goes 'commie' and starts regulating the, er, 'free' market? ROFL

      Please in future do at least a modicum of research before getting

    • by rtb61 (674572)

      Prime example of this, price of DVDs in Australia, often very closely align with the price of DVDs in the US, why http://www.amazon.com/ [amazon.com], that's why, plus low cost of transport, import duties on the medium only and you still pay GST. Add to that the ACCC made region coding non-enforceble and you can buy most dvd players fixed to be region free (you notice boc has been opened and inspected and confirmed sticker placed on it, the media companies dont want it continually advertised that Australia has legally

    • by drsmithy (35869)

      Allow free importation of goods from the US and other markets and watch the vendor premiums for your mysterious island continent collapse. If Australians could simply buy from Adobe US, It'd be pretty difficult for Adobe to maintain a price premium...

      There are few import restrictions to Australia in general and even fewer from the US thanks to the "Free" Trade Agreement.

  • by thatkid_2002 (1529917) on Saturday May 26, 2012 @12:53AM (#40118449)

    Is as useful as tits on a bull. Companies can charge whatever they damn well want for their software. Who is anybody to tell them different?

    Complaining about the lack of funding into open source or at least home-grown software is much more useful.

    • by LordLucless (582312) on Saturday May 26, 2012 @01:06AM (#40118511)

      It's not so much about high prices - it's about price discrimination. Yes, companies can charge whatever they damn well want for their software. And if they sell it for half the price in the US as compared to Australia, then customer's can damn well buy it wherever they want. And if companies introduce artificial barriers to stop the customers doing just that, that's when the government needs to smack them down.

      • This problem is not limited to software... Look up what prestige cars cost in Australia, vs what they cost in the US. Why do cars cost more here? The market can support it here, because there are enough idiots who don't question or aren't aware that they are paying so much more here than elsewhere.
    • Is as useful as tits on a bull.

      No It's not

      Companies can charge whatever they damn well want for their software.

      Sure, but they shouldn't be allowed to stop you importing it from another region.

      Who is anybody to tell them different?

      The Australian Government

    • Well its a bit unfair when the same game that cost $10 USD is somehow marked up to $70 AUD.

    • Companies can charge whatever they damn well want for their software.

      And people can criticize their decisions. But if people are indeed buying it anyway, I'd agree it's not useful.

    • by ghostdoc (1235612)

      Going by the very same logic, pirating their software is OK.

      If they can discriminate on their pricing I can discriminate on my sourcing.

  • You do live in a very remote country with vast distances between major points, shit doesn't just teleport there by magic.

    • by AlanS2002 (580378)

      Of course that's explains it all. It's the _very_expensive_ freight involved in the shipment of CDs. I knew there had to be an answer.

    • by davetv (897037)
      What about internet supplied products such as music downloads. There is no reason at all us Australians should pay $1.69 when he same track is $0.99 in the US. Remoteness is not a factor. It is select companies deliberately price gouging us because they feel the market will bear it. I for one look forward to law changes to correct this problem.
    • shit doesn't just teleport there by magic

      There's this thing, it's called the internet. It teleports stuff there by magic. At least a part of this investigation is into price discrimination on software.

    • by Nursie (632944)

      No, it gets here by mail order.

      For some reason it is way, way cheaper for me to order stuff from the far east, the US or even the UK and have it shipped over, than it is to get it from an australian website or retailer. Don't tell me that bulk shipping adds a 100% plus markup over individual shipping, these things work the other way around.

      And then there are other things like games, which you get online, which often launch at $50-60 in the US and AUD 100 ($102 right now) here. For the same thing, delivered

      • by dkf (304284)

        And then there are other things like games, which you get online, which often launch at $50-60 in the US and AUD 100 ($102 right now) here. For the same thing, delivered over the internet.

        But those poor poor distributors have to pay for the game to be shipped to you over your narrow and long tubes. Oh wait, you pay for that part too via your network subscription...

    • The price difference is well above the cost+profit margin of transportation.
      Why is it there are so many Americans who comment on stuff about other countries who automagically assume things that they have zero clue about.

    • by Anonymous Coward

      That's true - shipping costs theoretically should make prices different, on a dollars per kilo basis. For durable goods, there are many many cases where buying the item at retail in the US and shipping into Australia yourself will end up being far far cheaper than buying the item in Australia.

      One of the examples is a Lenovo X1 laptop. I just checked, and the same laptop is AUD1299 vs USD1019. As of this moment, AUD1299 is USD1265. That means Australians are paying 24% more (about $250) for the same product.

    • by ghostdoc (1235612)

      But Australia is closer to China (where everything gets made) ... so why are Australians paying more than Americans?

      And the boats that ship all our minerals to China can just fill up on stuff on the way back, so shipping should basically be free...

  • All Microsoft licensing on all products! Oh wait, is this not the submission form? Whatever, I'm in America anyway, lol.
  • Technet (Score:3, Interesting)

    by Anonymous Coward on Saturday May 26, 2012 @02:07AM (#40118791)

    Posting AC because of Slashdot's bug that prevents me from logging in.

    A Technet subscription is mysteriously $200 more dear a year in Australia despite us being quite happy to use US English and keyboards. Yet in Thailand, it's $40 a year, where they need a full translation and separate keyboard support. What's the difference?

    The Thai pirate software a lot. A *lot*.

    So I ask you, what's the simplist way for Australians to reduce the price of Technet?

  • by Tim99 (984437) on Saturday May 26, 2012 @03:40AM (#40119175)
    About 20 years ago an Australian banker told me that the reason that imported goods were expensive was multiple markups in a small economy.

    An importer would be lucky to get a 25% margin from a foreign supplier. They would then put a 30% margin on their sale to a wholesaler. The wholesaler puts a 20% margin on his sale to a distributer, and the distributer puts 20% on their sale to a retailer. The retailer then puts 30-60% on to you the purchaser. So a worst case is $(100 - 25) x 1.3 x 1.2 x 1.2 = ~$140 at the retailer - (Assuming parity between the US and AU dollar - The currency conversion only applies to the importer). You now need to add 10% Goods and Services Tax, which means that you could expect to pay $200 to $250.
    A more efficient set up is where a large importer also acts as the wholesaler and distributer, so you would probably be looking at $(100 - 30) x 1.4 = ~$100, say, roughly $145 to $175 retail.
    Compare this to an item bought directly on the internet from the US or UK. Even without a discount you are only going to pay $100 + shipping (say $15) - If you allow a small discount, the final price you pay is probably about $100. There is no GST on a personal import costing less than $1000. So even if retailers were able to persuade the Australian Government to impose GST on personal imports the most you would pay for the $100 item is ~$115.

    Caveat: Obviously it can get more complicated than that as you have to pay someone to convert the currency for you (Expect to pay ~2%). The cost of shipping from abroad can vary wildly based on the carrier and the amount of business that you give them. The original numbers were based on an economy when, 20 years ago, the AU dollar bought about 83 US cents.
    • This harks back to a practice among IT companies some years back called (I think) 'transfer pricing'. By charging the local branch of the company a very high cost price, the item could still be sold at a high price with little markup to be taxed in the local jurisdiction.
    • by Zaelath (2588189)

      And any of that relates to digital on-line sales, how?

      There are some costs in shipping shit to Australia, but if you're too stupid as Harvey Norman to arrange purchase direct from the supplier and ship it yourself I'm not sure how that's my problem; when I can purchase direct from a retailer and ship a single unit for less even though I can't take advantage of the price benefits of shipping in bulk.

      The real issue in your mythical supply chain is two-fold:

      - Australian retail wages are higher than in the US,

      • by Tim99 (984437)

        And any of that relates to digital on-line sales, how?

        I know this is slashdot where we don't normally RTFAs, but I (stupidly) actually read them. Excerpts from the articles:-

        ... described as “glaring price differentials” with respect to other “culprits”, naming Lenovo, which slugged Australians with a $560 markup on its ThinkPad X1 laptop when it was released locally in May ... ... and Adobe, which has regularly marked up its Creative Suite products substantially upon launch in

        • by Zaelath (2588189)

          Australian banks will lend what you can afford to pay, if nothing in your life gets worse. I would contend that foreclosure rates aren't up because people were overcommitted on their reported income, they are up because people lost that income.

          In any case, I agree the land prices are a bit high (if it was actually $25K and 20 years, then it should be closer to $116K at 8% a year which isn't uncommon in Australia's messed up housing market), but that's because if the government sells that land at $25K it dev

  • Australia Post love shipping stuff everywhere. Our governments know we can't afford to let such core infrastructure die, regardless of the whim and desire of powerful, rich tyrants like and the rest of the retail industry incumbents. You wanted a free market, and the free market wants your stale business model to die quietly. And don't start crying about jobs, there'll be new industries creating new types of jobs in the wake of the people you constantly "down-size" to prop up your bottom line or improve th
  • The real evil in our representative democracies is regulatory capture. http://en.wikipedia.org/wiki/Regulatory_capture [wikipedia.org]

    For instance software. Ubuntu, Apache, etc have shown that Copyright laws are not necessary in the development of good software. I suspect the same is true in music, movies, books and a lot of other stuff.

    The copyright laws funnel money to organizations (MPAA, RIAA et al) that advertise the product and "capture" favorable regulations. (is copyright really necessary to produce good movies

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