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February 11, 2013

Apple Taking a Stand in Australia to Explain High Prices

By Steve Anderson, Contributing TMCnet Writer

Anyone who's done some computer shopping lately knows that buying a PC is probably going to save quite a bit of cash over buying Apple (News - Alert), whose products are commonly more expensive than the norm. The Australian Parliament has also taken notice of this particular fact. Instead of chalking it up to the vagaries of the invisible hand of the market, however, the Australian Parliament has subpoenaed Apple to go to Canberra for a hearing on March 22 to explain its traditionally higher prices.

Apple wasn't the only one called on the carpet by the Australian Parliament either. Both Microsoft and Adobe (News - Alert) also received summonses to appear, but the reason behind it seems to be the same for all three. According to the summons, Australia's House Committee on Infrastructure and Communications wants the three to explain why not only their products cost so much, but also why their products cost so much more in Australia when compared to other countries.

This is actually part of a larger effort that's been going on since last July, but most of the other companies targeted supplied answers to the earlier effort, the Inquiry into IT Pricing. Microsoft (News - Alert), Apple, and Adobe, meanwhile, have reportedly failed to provide answers to the satisfaction of Australian legislators.

Image via Shutterstock

Australian MP Ed Husic, who is overseeing the Inquiry into IT Pricing initiative, summed up the issues that led to an Australian summons: "These firms should have cooperated and been prepared to be more open and transparent about their pricing approaches... In what's probably the first time anywhere in the world, these IT firms are now being called by the Australian Parliament to explain why they price their products so much higher in Australia compared to the US."

It will be interesting to see what response Adobe, Apple and Microsoft can come up with during their stay in Canberra. Chances are good it will have something to do with market conditions in general; game companies have already seen more than a little difficulty when it comes to releasing product in Australia.

Australia has a ratings board similar to that of the ESRB, but Australia's system has, arguably, a bit more force behind it. For some time, games that were stronger than the ratings system's capability to classify were designated "refused classification,” meaning they wouldn't be allowed for sale in Australia. “Fallout 3,” for example, was forced to create the drug "Med-X" for use in the game primarily because of Australia's ratings system.

Some might call this a populist move, but considering that even digital delivery products such as those found on Steam  are getting their prices raised, it's a question that could stand an answer. Whether it's greed on the parts of the companies selling the products, or it's a necessity due to the sheer amount of government intervention involved in selling products – or even a combination of the two or something completely different – the ultimate answer to the question of why software costs more in Australia will be available fairly soon, and that should be worth seeing when it hits.

Edited by Allison Boccamazzo
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