iTunes Preparing For Broad Latin American Launch
iTunes Preparing For Broad Latin American Launch

Representatives from Apple Computer have been summoned to explain why prices at iTunes and other digital products are so expensive Down Under.

The technology giant, along with Adobe and Microsoft, will have to appear before Australia’s Federal Parliamentary Committee’s investigation into the high-prices consumers here pay for digital music, software, games and hardware.

The three companies have been formally summoned to a public hearing March 22 in the national Canberra, the House Committee on Infrastructure and Communications said in a statement today.

The inquiry into digital prices has been running since last July, and had been brought about by Ed Husic, Labor Member of Parliament for the western Sydney seat of Chifley.  Husic told there was evidence some tunes on the Australian iTunes store cost three-times the price of the same track in the U.S.

“I still can’t work out why the differences are as great as they are,” Husic said. “Why a track that might $2.99 here cost $0.99 in the U.S. And I think it is time Apple and others explained the differences in pricing. “

Australia's iTunes Music Store to be Probed on Pricing Points

Consumer rights group Choice has welcomed the move, and its CEO Alan Kirkland hopes to see a downward pressure on prices.

“Australians are waking up to the fact that we are being ripped off. We believe it’s time that these companies realise this and start pricing fairly in the Australian market,” Kirkland said in a statement issued today.
"We found that with one Microsoft software development product, you could fly to Los Angeles return to buy the software and still save thousands of dollars. With price differences this stark, the same old excuses just won’t cut it anymore.”
Choice noted that the inquiry had been hampered by “stonewalling” from the three tech companies, which it says have “so far refused to publicly front the inquiry and explain why they charge higher prices to Australians for their products.”

Digital music services like iTunes are driving Australia’s record business into growth. In recent days, trade body ARIA announced a 4% rise in value in 2012, underpinned by growth of more than 30% from digital music channels. iTunes opened for business here in 2005 and is the runaway No. 1 player in the digital download business in Australia, where it commands upwards of 70% of all digital download sales, sources say.

“The inquiry should open up these (pricing) issues,” notes Husic. “A lot of people think the inquiry itself should be about hauling the vendors in. I don’t see it that way. I see it as about getting answers and also an opportunity for the vendors themselves to explain why they price them the way they do. At either rate, it provides a pretty good chance for consumers to tell the big vendors they’re no longer willing to bear these prices and there needs to be a fare-dinkum inquiry.”

Choice is also urging Australia’s government to investigate whether measures used to sustaininternational price discrimination, like geo-blocking, are anti-competitive.

The three tech companies have yet to comment on the latest development.