Quote:
Originally Posted by DarkScribe
They are currently being investigated by an Australian Governmental inquiry as to why they add a significant price premium to all of their products sold in Australia.
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Quote:
Originally Posted by david_e
So we should rely on the government to establish what is a fair price for goods instead of the open market?
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The question is whether it really is an open market. For most physical products, it is entirely possible to purchase an item anywhere in the world at the local price and get it shipped to your location. The internet has made this even easier and certainly in Australia the rate at which people have been purchasing from overseas has grown exponentially in the past few years. Not only is it now easier to see how much cheaper items are overseas, it is also now much easier to purchase items from overseas. [1]
When it comes to digital items such as software, music, books, etc, certain companies deliberately install obstacles to overseas purchases. It costs more to download music from iTunes in Australia than in the US (I'm not much of a music buyer so I don't know the other major retailers). It often costs more to download books from book retailers (Amazon, Kobo, etc) in Australia than the US - including when parallel import restrictions are not in play. It costs more to download software from most providers in Australia than the US - and there are examples of individuals who purchased software while in the US but when they tried to install it in Australia it would not allow the install.
So is it an open market? I don't think so. If it were truly an open market then the consumer should be allowed to purchase from the supplier of their choice, which is clearly not the case for digital products.
It is not a case of the government setting prices - it is a case of the government ensuring that the market is indeed open. Note that Apple is certainly not the only company involved in the inquiry - it is a general inquiry into tech and digital pricing in Australia, but Apple iTunes [2] is one of the bigger names and a popular example.
[1] Note that even with high shipping costs it is still often much cheaper to purchase from overseas and get it shipped, which tells you something about the markup in Australia. For example, a typical MMPB in the US is about USD7.99 - in Australia it is between AUD14.99 to 19.99 - and the AUD is currently trading at about USD1.04. For paper books there are currently parallel import restrictions for bookshops, but not for individual buyers, so not surprisingly local bookshops are dropping like flies while Amazon and Book Depository are doing a roaring trade. Another example - when I was looking to purchase my first ereader in 2010 I spent a lot of time looking through these forums. No major retailers were selling ereaders in Australia at the time. To purchase a Sony PRS-300 from an Australian retailer would have been about AUD495. As I had a holiday planned in the US I waited a couple of months and bought it for USD150. At the time, 1AUD=0.90USD. And yes, I also took home a small suitcase of paperbacks - seriously!
In the case of paper books it is usually (but not always) a function of local publishers. However for many other products (electronics, clothes, sports gear) it is the supplier - a single company - who sets different prices for distributors according to region. In the past, this price differentiation was entirely feasible as markets were not global and it was difficult to purchase items from overseas. With the internet and digital products, many companies are attempting to artificially regionalise the market, and this is where the conflict lies.
[2] Ironically iPods were released to the Australian market about a year or so before an Australian iTunes store was opened, which begs the question of where they thought customers were getting their music...