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Australian Govt Forces Apple, Adobe, Microsoft To Explain Price Hikes
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."
Printing the instructions upside down costs money silly.
I already know the answer. It's the same reason Canadians pay far more for the same items in the US even though our dollar has been at parity for years now.
There was one scandal where Bombardier, a Canadian company receiving government money, was charging Canadians more for ATVs made in Canada than they charged in the US. So effectively the Canadian government was subsidizing a company to rip-off it's own citizens.
"Why? Because fuck you. That's why."
You talk about that one scandal as if it's unique, there are MANY examples of us paying more for Canadian made products than the Americans do. There was a news article a year or two ago about a specific model of car that was priced more than $10,000 higher at the Canadian dealership across the street from the factory than it was in Hawaii, and best of all, the excuse given was that the transportation costs in Canada were higher!
Thing is, the Canadian government has "investigated" this sort of thing many times, including yet another report that came out just last week. Do you think anything will ever change?
Canadians pay more because... well, because we pay more, that's why!
On some things we can buy online and get the same price as the rest of the world, but if you just can't do that (some products don't work well that way, and the government makes it illegal to do so with other ones, not to mention the companies that flat out refuse to sell to customers outside the US) then you're just screwed.
When you print money to pay off debts the currency devalues and it is a no brainer. THe exchange rates are going downhill as the house wants to debate whether to default or not eveyr 3 months.
Therefore, the Bank of Australia wants a higher percentage to avoid the risk as the dollar is the worlds worst currency right now with the highest risk. ... Well Japan might be tieing the US in this area if the government improves more printing of money.
So MS responds with the 30% premium to convert dollars to Australias currency by passing it on to the consumer.
IT also explains why healthcare costs are skyrocketing up with insurnace, food, housing and student loans while incomes decline. All this free money given to rich by low interest rates inflates the money supply.
Holy shit. It's a real life application of the Chewbacca Defense. This is amazing... :)
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.
Actually, Valve is mentioned in the article as one that people wanted investigated - but not as one that required a subpoena to provide information. This suggests that Valve voluntarily told them how their pricing works.
Which, as far as I know, is "We set what price the producer wants us to, or they refuse to sell on Steam at all."
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......
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
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.
I think the problem is that the manufacturer's use globalization to pick and choose the cheapest components, and the cheapest labour form anywhere they can, and then turn around and deny their customer's the same thing by region locking things, writing contracts prohibiting their dealers from selling to people out of country, and all sorts of other BS that they themselves don't have to deal with.
If "Free Trade" applied to customers as equally as corporations I don't think anyone would have an issue with a company pricing things however they wanted, wherever they wanted. It's the fact that I often am not allowed to pick the cheapest location that bothers me.
No they shouldn't. The producers determine the price for Austrailia if they sell there at all.
This is similar to the philosophy in China. Everyone watches the latest Hollywood movies and uses the latest software. If the price is low enough they may decide to actually buy the legitimate copy instead of the bootleg. It sure is great when the government doesn't get involved... gotta love the free market system :).
. . . it's because they have to translate their product into a weird foreign language. Right?
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Canada and the US share a boarder, so it is somewhat ridiculous for them to charge more in Canada than in Hawaii, that's a fair complaint. However, what I think is even more ridiculous is a car that's made in South Australia, the Pontiac G8 is cheaper to buy in the US than in South Australia. The average price in South Australia is around $50,000 the average price in the US is around $30,000. Remembering that the dollar was at parity or close to parity. This means it was $20,000 cheaper to purchase a car that had been shipped to the US. GM has consistently done this to us, and just about every large company does this to us.
Valve actually doesn't do it that much, though some game producers that use Steam do.
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Let me have a go:
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While I have no love for those companies, I wonder if the answer to your questions isn't going to be obvious (and annoying). It's "known" here in the US, that Europeans are willing to pay more for the same goods, and thus we charge them more for the same goods. Americans are known for choosing to buy cheap crap that will break in a week because it's cheaper, therefore more reliable vendors have to go lower to make the sale. Going to the farthest extreme, the Chinese are known for stealing software, movies, etc. and thus to make a sale there the price has to be very low.
They call this "market based pricing", and I agree that it is actually quite a destructive practice, but I don't think it's illegal.
Yet Windows 7 is Windows 7, doesn't take much more to sell/support it in the UK/Australia/etc vs in the USA, why does it cost so much more? Delivery is dirt cheap, support can't justify a 200% cost surely!
It's not like the hardware is made in the USA and shipped to Australia, it's all made in the same Chinese/Asian factories and shipped over the Pacific anyway! Australians buy the same TVs/Computers/Cars (when we can get a decent model on the market) as the USA does. Sure, we're a smaller market, but that cost differences are Immense!
You know what, you're right! That $5000 spread across every Australian customer definitely does equate to 50% more per copy!
http://www.classification.gov.au/Industry/Journey/Pages/CGnonA/Step3.aspx
They don't just have to pay to get the classification. They have to pay lawyers to do the paperwork, accountants to handle the financials, service and support to handle refunds and disputes, and so on (not to mention the managerial overheads). It wouldn't surprise me if these costs exceeded $1 million.
Don't get me wrong - I'm not saying that the prices are always justified, and I'm sure that there is a big "because we can" factor as well. As an Australian, I too have been outraged on more than one occasion by the price that we have to pay for goods in comparison with the US. However, my day job (which admittedly involves hardware, not software) has given me an appreciation for the amount of actual effort required before you can start selling something in another country, and the company needs to recoup that cost somehow.
--- "When you're strange"
And yet if I was to go overseas and buy as many copies of Photoshop as I can fit in my bag, jet back to Oz and resell them it is illegal.
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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.
You seem to be under the misguided belief that costs determine prices. In the real world, that's only rarely true,
Microsoft, Adobe, etc are not charities like the Raspberry Pi foundation; they adjust their prices in order to maximize their profits.
In an ideal scenario, competition would lower the prices. There are many reasons why this doesn't happen in this market, but you can thank government-granted monopolies like patents for a big chunk of that - it's kinda hard to compete when you can't even implement FAT on your OS without paying Microsoft.
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Mod parent insightful. Tax and market conditions do account for some differences, but not that drastic. Often this situation has to do with over-reaching copyright, trademark and other legislation that allows companies to enforce region pricing.
I'm an Australian, and I pay more for technology than people in other parts of the world including the US. This is kind of a pain in the ass, but I have to admit that if it wasn't worth it to me I wouldn't pay. Our currency is really strong at the moment, so in general imports are very cheap and local goods/services are very expensive, and we really pay very little for technology in relative terms.
I sure wouldn't want other countries which buy our imports to say to us "wait that's not fair; it only costs you guys $40/tonne to export iron ore and we're paying $150/tonne. We're going to get the government involved to try and fight that somehow".
To that I would say "the value of something is whatever its buyer is willing to pay for it" and we have to be consistent in that.
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And there is a very high cost to having a Walmart in your town. Low wages, no or poor health benefits shifting the costs to the taxpayer along with the massive tax incentives they receive that other local businesses can't get drive local businesses out of business. Whole towns have been decimated economically by a Walmart moving in. And when they become the only employer a town has, that town will always be at the mercy of Walmart.
Might I suggest the following for you:
http://www.youtube.com/watch?v=Jazb24Q2s94
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