Australians routinely pay a 50% premium compared with inhabitants of other countries for computer software and hardware, as well as downloaded music, games and books, a parliamentary inquiry has found. Digital and IT products, including education products and programs that assist with disabled access, are more expensive in Australia than can be explained by the country’s remoteness and differences in tax regimes, according to a report by the House standing committee on infrastructure and communications.
The report suggests educating Australian consumers on how to find the best possible prices for digital and IT goods, even where geoblocks are in place to prevent international purchases.
The MPs have recommended scrapping stringent parallel import restrictions that are meant to prevent consumers finding cheaper goods overseas, as well as altering the law to secure greater consumer rights.
The report, entitled At What Cost? IT Pricing and the Australia Tax
, suggests, as a last resort, banning geoblocking – making it impossible for companies to restrict access to their products based on a consumer’s location in Australia – if its nine other recommendations fail to right the market.
In discussing the price differences, the committee noted the particular impact on libraries, the education sector, non-profit organisations and low-income students, and heard evidence from small businesses about the impact of greater costs on international competition.
The report describes access to web-based services as “all-important”, saying: “If people are experiencing isolation, social disadvantage, financial difficulties, or other challenges, perhaps even relating to their business, and are not able to access affordable IT, their situation is likely to get worse.”
In gathering evidence, the inquiry found significant price differences between software, hardware and digital media in Australia compared with elsewhere.
In one case, MPs were told, it would be cheaper for someone to fly from Australia to the US, purchase software there, then fly back again, than to buy the software in question in Australia.
Industry bodies indicated that high wage and rent costs, the small size of the market and rigorous warranty protection costs all contributed to higher local prices, but the report said despite their submissions it was “difficult to avoid the conclusion that these practices amount to international price discrimination to the clear disadvantage of Australian consumers and businesses”.
The report surveyed more than 150 professional products and found a mean price difference of 50%.
Adobe products showed an average difference of 42%, while Microsoft
’s were 66% more expensive and Autodesk’s 51% more expensive.
Specialist software designed to help disabled people, such as braille readers and screen readers, was also found to be significantly more expensive in real terms within Australia.
Evidence submitted and collected by the inquiry found downloaded music was 52% more expensive in Australia, while ebooks had an average price difference of 16%.
Games were 84% more expensive on average, and the committee noted: “In some cases price disparities in relation to digitally delivered games are so large that it can be substantially cheaper for Australian consumers to purchase a physical copy of new release games from a UK-based online store and have it shipped 15,000km to Australia.”
The committee heard that high prices and limited availability of copyright material could generate infringement and undermine the copyright system, in part by creating a mindset among consumers that prices were unfair and that infringement was therefore justified.
MPs were also critical of IT companies and industry bodies, whose written submissions were “of limited benefit to the inquiry and in the committee’s view did little to address consumers’ concerns”.
Earlier this year the committee took the unusual step of summonsing three executives from Apple, Adobe and Microsoft
after invitations to attend were repeatedly declined.
It also noted reluctance by some universities to participate in the process “for fear of jeopardising ongoing and future contract negotiations with major IT vendors”.