Govt Inquiry finds we're paying too much for games/software.

[Drift]

The House of Representatives Infrastructure and Communications Committee has today released its report based on its extensive inquiry into IT pricing in Australia. Specifically, the inquiry investigated claims that Australian consumers pay significantly higher prices for IT products, including games, than consumers overseas.

“The committee found that big IT companies and copyright holders charge Australians, on average, an extra 50 per cent, a practice consumers call the ‘Australia Tax’”, said committee chair Nick Champion MP in a statement. “High IT prices can have significant impacts given the critical role IT plays in many areas of Australian life.”

“While companies should remain free to set their own prices, the committee took the view that there are a number of ways in which Australia can act to increase competition in IT markets, which should reduce prices over time.”

The 150-page report, which includes an extensive amount of consumer submissions, industry responses and a number of key findings and recommendations, covers a lot of ground.

On the topic of games, the report notes that – according to a submission from Australian consumer watchdog Choice – a comparison of the prices of 20 recent and new-release games sold on EB Games’ Australian website against the same company’s US website showed only one game was at parity with the US. The majority of games were between 40 per cent to 90 per cent more expensive on the Australian website. The submission also illustrated the worst price differentials on Steam can be 200 to 300 per cent more expensive in Australia.

The report also notes that the price differences between digital games in Australia and overseas can be so large that it can be actually cheaper to purchase a physical copy of new release games from a UK-based online store and have it shipped 15,000km to Australia.

The committee explored a list of reasons proposed by the industry for IT pricing differences, including differences in advertised prices , relative market size, wages and occupancy costs, and several others. The Committee acknowledged that some confusion exists due to differences in how taxes are communicated in advertised prices (in Australia, advertised prices must include GST, while in the United States advertised prices do not include sales taxes), and also conceded that there are factors specific to the Australian market which can make it a higher-cost environment for IT vendors compared with other markets around the world (“Australia’s population is comparatively small and spread over a large geographical area, which means that higher distribution, wage and occupancy costs must be covered by smaller unit sales than in a market like the US”). However, the Committee concluded that “in many instances these higher costs cannot, even cumulatively, explain the price differences consumers experience in relation to many IT products, and especially those delivered via the internet.”

In response to the findings the Committee has put forward a variety of recommendations, including relaxing parallel import restrictions and amending the Copyright Act 1968 (Cth) to “clarify and secure consumers’ rights to circumvent technological protection measures that control geographic market segmentation” to put the kybosh on geo-blocking.

When and/or if the government will set about implementing any the recommendations stemming from the inquiry is unknown at this stage.

We've all known since online shopping opened the world to us, however should the recommendations be implemented, the implications on pricing across the board in Australia could be significant.

for those interested.

[admin]

Some more here

Probably the most interesting part that Drift has already mentioned is Geo Blocking restrictions.

• It wants the import restrictions in the Copyright Act, 1968 removed and add a clause to allow consumers to circumvent geoblocking to ensure they're getting the best price. It also wants to teach Australian consumers how to get around geoblocking and provide more access to technologies that allow them to do so. Needless to say they will also need educating on how far Australian Consumer Law allows them to go on this.

[mandc]

It was laughable reading how the big companies answered as to why it cost so much more to download an album, game or software in Australia...it's a bit hard to cite import and distribution costs when it comes from a server in the US direct to your computer
Talk about defending the indefensible....

[admin]

I liked this one :

In some cases it was found that Australians could fly to the US, buy the product there and fly home and still pay less than what you would pay locally.

Unbelievable.

[fandtm666]

the thing is it is not just the software and IT industry.

They mentioned " geofencing " and this is big in the boating
electronics industry as well , you can buy the exact
same sounder/gps combo from the USA for well over
$1000 less than you can do here and this is due to the
" geofencing " they input into the units

[Akh-Horus]

Its just plain gouging.

[andrew172]

They've been trying to make as much money as they can using obscure reasons that under the lightest scrutinization could never be justified. Hopefully there'll be a plummet in prices now that the cat's been let out of the bag.