Australian Parliament to Investigate Imbalance in Software Pricing

An Australian parliamentary enquiry has been signed off by Stephen Conroy, the minister for communications. The enquiry in question will investigate the imbalance in pricing for online services and content with the primary focus being on the pricing of content for online games, film, music, and entertainment services, according to a report by The Sydney Morning Herald.

In a letter to fellow MP Ed Husic, Conroy wrote:

“There is evidence to suggest that the innovative use of technology is not always matched with innovative new business models in the case of products and services distributed online… I agree that Australian businesses and households should have access to IT software and hardware that is fairly priced relative to other jurisdictions… the global digital economy is likely to make it increasingly difficult to sustain business models that are based on a geographic carve-up of markets.”

Companies such as Apple and Microsoft in particular will be among numerous major companies that are questioned to explain their pricing strategies once the enquiry begins later this year.

The terms of the enquiry are being finalised by Stephen Conroy. However, it will be conducted by the House of Representatives standing committee on infrastructure and communications in the hope that, by bringing attention and exposing the issue, it will motivate change in pricing strategies.

Analysis: Let me begin by drawing your attention to some figures. An online copy of Microsoft Office 2010 Professional costs $349 in the U.S. In Australia, this price balloons to $849 AUD in Australia. Mac OSX Server v10.6 Snow Leopard in the U.S. will set you back $499, compared to the asking price of $699 AUD here in Australia, and this extends to the gaming industry. Many games offered on PSN or Xbox Live are priced somewhat higher when compared to their U.S. counterparts. This isn’t the first time I’ve voiced my disdain for the large differences in price on the site, and to be be completely honet, I wasn’t even entirely aware the problem was so large outside of retail. Reasons for the price hike in retail include how the Australian market is significantly smaller and the cost of shipping simply do not apply here.

Frankly, I don’t really understand how there could be such a significant price difference outside of the foreign exchange rates, and how this has been tolerated for such a long period of time is beyond me. We’re talking about purely online goods here. No shipping, retail profits, or packaging costs to take into account; it’s just the product, and the fact that some of these differences in price are upwards of $200 is ridiculous.

I for one applaud the enquiry being drawn up by Stephen Conroy, and hopefully, this leads to a pricing structure that’s much more reasonable. Although I’m not entirely sure how effective this may be, I’m hopeful that this will lead to some changes. In the world of online technology, it’s very much a global market, and price differences such as these are inexplicable. I’m eager to hear how Apple and Microsoft respond to these statements.

Nathan Wood

About Nathan Wood

When he picked up a controller on that fateful day at the age of 6, Nathan had no idea how quickly it would captivate him. Enjoying a wide range of games, he is up for anything as long as it is of good quality, interesting or laughably bad. When not playing or writing about video games, he enjoys music, film, basketball and art. He is currently completing his last year of his IB diploma before mastering the great land known only as: University.