Microsoft, Apple, Adobe face the IT pricing inquiry – the TL;DR version

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Image: Mark Pegrum/OzMark17 via Flickr (Creative Commons)

Image: Mark Pegrum/OzMark17 via Flickr (Creative Commons)

Adobe, Apple and Microsoft faced the IT pricing inquiry today, after they were subpoenaed to face the committee after they were stonewalling proceedings. It has been a really long day, and so we’ve decided to condense everything down into this little handy post. Think of it as your TL;DR version of the entire event.

The main points:

  • Apple says that the reason why there is a 70 percent markup on iTunes content is because of the “old-fashioned notions” of record labels, movie studios and TV networks – according to Apple Australia’s Tony King. It compares itself to being similar to JB Hi Fi and Sanity with the iTunes markup.
  • Apple says software is priced at parity with the US, hardware is “moderately” more expensive than the US market. “For example, Apple must consider differences between countries in product costs, freight charges, local sales taxes, levies, import duties, channel economics, competition and local laws regarding advertised prices,” King told the committee.
  • Turns out there is a match-pricing policy at Apple retail stores. “If someone brings an ad into one of our retail stores, our Apple retail stores have a price-matching policy.”
  • Adobe claims that the reason why we pay extra was because it is personalised, though admit that it is only the local community. Creative Cloud is in line with the US, and student pricing is cheaper; claims Adobe. Did not fly well with the Committee, however.
  • Responding to the fact that it is cheaper to fly to the US, get it there, and fly back – “If you want to… you can, but if you want to download it form the US, just go buy Creative Cloud instead”. However, they are not obligated to provide warranty.
  • Adobe and Apple’s pricing is dictated by head office in the US. Microsoft’s pricing is not – meaning that the price you’re paying here for Windows and Office is set by Microsoft Australia. Marlow defends criticism of not operating fairly, saying they are operating legally.
  • When told that the Committee found Microsoft products were nearly 66 percent more expensive in Australia than the US, Microsoft’s MD Pip Marlow said that Australians don’t perceived their products to be more expensive. “If we price our products too high our customers will vote with their wallets and we will see our sales decline.”

Sources: ABC, Gizmodo, The Age