Apple, Adobe, Microsoft try to justify higher prices in Australia

Appearing before an Australian committee, executives from the three companies struggle to explain why Australian consumers are socked with higher prices for digital content.

Australian buyers of digital products from Apple, Adobe, and Microsoft shell out higher prices than do those in other countries. Just why is a question all three companies were finally forced to answer.

Executives from the three tech players appeared today before an Australian Parliamentary committee investigating charges of price gouging on software and other digital products .

The committee is looking into the charges based on a 2011 report that found a huge difference in the prices charged in Australia versus those in other countries.

Last month, Apple, Adobe, and Microsoft were summoned to address the complaints over higher prices at a public committee hearing. At that hearing today, all three supplied their own unique if not satisfying responses, as reported by Reuters.

Tony King, the vice president for Apple Australia, New Zealand, and South Asia, said the cost of digital content is based on wholesale prices negotiated with movie studios, TV networks, and record labels.

"The content industry still runs with perhaps old-fashioned notions of country borders or territories or markets," King said, according to Reuters. Asked why Apple couldn't use its clout to trim those prices, King responded: "The cards are in the hand of the folks who own the content; that is not in our hand to play."

Paul Robson, Adobe's managing director for Australia and New Zealand, told the committee that the higher digital prices in Australia are the cost of doing business there, ZDNet reported. Local Adobe operations, staff salaries, and investments in sales channels drive up the cost of software, Robson said.

Adobe was also dinged because users in Australia who try to save money by purchasing software from the U.S. Web site are automatically redirected to the Australian site. Robson justified that action by saying the Australian site offers a more "personalized experience" to users and allows Adobe to track sales based on the region.

Last month, Adobe did cut the cost of Creative Cloud subscriptions in Australia to match the price charged in the United States.

Microsoft Australia's managing director, Pip Marlow, seemed hard-pressed to offer any explanation for higher prices.

Committee member and Labor Party representative Stephen Jones accused Microsoft of charging higher prices for its software because there's little alternative, the Sydney Morning Herald reported.

In response, Marlow simply said that "if we price our products too high our customers will vote with their wallets and we will see our sales decline."

Australian lawmakers had previously said they hoped calling the companies to testify might convince them to lower their prices. But none of today's responses seemed to please the committee, Reuters noted. Members called some of the answers "evasive" and expressed skepticism about others.

 

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