back to article Australian Parliament issues summons to Apple, Microsoft, Adobe

The IT Pricing Inquiry being conducted by Australia's House Committee on Infrastructure and Communications has issued summons to Apple, Microsoft and Adobe. The inquiry kicked off in 2012 and is investigating why Australians pay more for hardware and software than those overseas. At current exchange rate one Australian dollar …


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  1. Thorne

    And the net result will be?


    1. Eddy Ito

      Re: And the net result will be?

      That's probably true but if they do anything it will be raise the US prices to match.

    2. LarsG


      We've lived with this in the UK for years, happens on everything from computers to cars, the excuse is always that it is more expensive to import goods to the UK, something to do with being surrounded by water.

      It's a load of tosh, the real reason is that it it not as easy to jump into a car and pop across to another country (like in the EU) to buy it cheaper.

      Just like Australia, surrounded by water the shysters consider us a captive audience.

      1. Anonymous Coward
        Anonymous Coward

        Re: Listen

        I kinda wish they'd do this in the UK. It may only be a good gumming but still.

        I get so annoyed when I hear USA folks complain about "oh it's so expensive to buy X and Y these days.

        Oh no it costs $3.50 per gallon of petrol, vs £6.50 (roughly) it costs in the UK. (which is about $10.20)

        Or the glorious "$600 for the PS3? That's far too expensive!" vs out £600 which at the time equated to $1164 (at the time the exchange rate was 1.94 £ to the $)

        Admitadly we get taxed out the wazzoo. But still I'd love to see a better explanation, since the 20%VAT doesn't nearly cover such a huge amount.

        1. EvilGav 1
          Thumb Down

          @AC 08.32 Re: Listen

          "Oh no it costs $3.50 per gallon of petrol, vs £6.50 (roughly) it costs in the UK. (which is about $10.20)"

          I'm not saying that you're entirely wrong, but i've no idea where you go and pay £1.45 a litre for petrol - accordign to OFT the average price is £1.36.

          The next point is that the US gallon is only 3.5 litre's, whereas the UK gallon is 4.5 litres.

          The actual comparison would be $3.50 vs £4.76, so around $7.15. You also need to compare the cost of UK petrol against what the US calls "premium". Our normal petrol is much better than the US, they run (IIRC) 85RON, whereas we run 95RON (burns far more efficiently) - the US premium petrol is what we consider normal.

          1. tomban

            Re: @AC 08.32 Listen

            US gallon is 3.78541 Litres, but yeah, not the same.

          2. Anonymous Coward

            Re: @AC 08.32 Listen

            "The next point is that the US gallon is only 3.5 litre's, whereas the UK gallon is 4.5 litres."

            Umm no - the US Galleon is 4.25 liters, and the Imperial Galleon is 4.5 liters...

            And yes I spelt Liters rite, because that is the way it's sed. "Leet-ers" not "Leet-Res."

            Frog bastards.

            1. Captain Underpants

              Re: @AC 08.32 Listen

              @0h4FS: A 4.25 litre galleon? That's not going to be of use to any bugger!

            2. Eddy Ito


              1 gallon (UK) = 1.2 gallons (US). Not much point in converting each to metric measures just to do the comparison.

          3. hurtlebum

            Re: @AC 08.32 Listen

            "Our normal petrol is much better than the US, they run (IIRC) 85RON, whereas we run 95RON (burns far more efficiently) - the US premium petrol is what we consider normal."

            They don't use RON to determine the octane content over here, they use AKI (written on pumps as (R+M)/2 ) . The basic stuff (87 in most places, not 85 unless you are in high elevation places) is pretty much equivalent to European 92 RON. The US premium at 91 AKI is pretty much equivalent to European 95 RON.

            Still and all, I (a Brit living in the US) laugh when they complain about how gas is costing too much (it's all Obama's fault apparently) here. It's cheaper than most places, so quit whining. Additionally, whilst it costs half as much, I use more than twice as much here as I did in the UK. Cars are horribly inefficient and distances are much further (I live on the West coast). There is no equivalent to parking in the town center and walking around all the shops, we have to drive to each one we need to visit.

            1. Anonymous Coward
              Anonymous Coward

              Re: @AC 08.32 Listen

              "Cars are horribly inefficient and distances are much further (I live on the West coast). There is no equivalent to parking in the town center and walking around all the shops, we have to drive to each one we need to visit."

              Sounds like poor city planning.

          4. Anonymous Coward
            Anonymous Coward

            Re: @AC 08.32 Listen

            Way to split hairs evilgav

  2. Katie Saucey

    "They have got a growing number of retail outlets, which I am happy about—they are creating jobs locally; that is great—but surely those outlets do not cost $5.5 billion to maintain.”

    A quick Google gives the number of Australian Apple stores as 18. Well, that's only ~300 000 000$/outlet, seems legit... I assume each store employs 5000-6000 people?

    1. Michael Wojcik Silver badge

      A quick Google gives the number of Australian Apple stores as 18. Well, that's only ~300 000 000$/outlet, seems legit... I assume each store employs 5000-6000 people?

      You're forgetting the R&D costs associated with the Apple Store - that arrangement of tables didn't happen by accident! I bet the Geniuses spent weeks moving furniture about before they came up with that.

  3. frank ly

    (but maybe not a joke)

    The $5.5 billion is to pay for a small army of world-class psychics, who work in shifts 24/7, to maintain a reality distortion field over Australia. This is the only explanation I can think of for why Australians spend so much money buying Apple products.

    1. Lars Silver badge

      Re: (but maybe not a joke)

      Just stop buying the shit.

    2. Anonymous Coward

      Re: (but maybe not a joke)

      Apparently Apple spent $5 billion of that profit in a (failed) attempt to map out the city "Mildura" in the middle of Murray-Sunset National Park.

      1. Anonymous Coward
        Anonymous Coward

        Re: (but maybe not a joke)

        or $5 billion on buying Mildura so they could move it to where Maps said it was and avoid having to admit they were wrong.

  4. Anonymous Coward
    Anonymous Coward

    I always wondered if these multinational companies didn't double dip in taxes. Profits are taxed but what would keep them from using costs in another area to be used locally? Say for support as an example. Apple needed to employ x number of people to support their product, the support staff may be elsewhere though. Then in that other region, Apple uses those same support staff to reduce their profits yet again locally.

    Given that if they were audited, the two tax authorities would not be in communication and thus not know that Apple is using the same cost more than once.

    1. Anonymous Coward
      Anonymous Coward

      "Profits are taxed but what would keep them from using costs in another area to be used locally?"

      This is, as I understand it, the basic idea. Apple US set up a company called Apple AU (say) and then charge Apple AU $5bn for the "intellectual property rights" to use the Apple name. That, of course, costs nothing for Apple but enters Apple AU's books as a tax deductible cost.

      In fact, it would not be Apple US which levied the charge as that $5bn would incur tax in the US. It's much more likely to be Apple LUX who levy the charge and incur a tiny Luxembourg taxation level. The money is then laundered out of Luxembourg by various methods.

      All of which is almost certainly illegal - in that the original charge is fraudulent - but because so much money is being pushed into making governments treat IP as a real thing it has become difficult for politicians to act on it, as saying "this IP isn't worth $5bn or anything like it" will instantly remove them from the IP lobbyists' Christmas list of bungs and non-exec directorships and various other funds for their cozy retirements.

  5. Esskay
    Thumb Down


    their "R&D centres" are "located" in high tax nations, whilst their "sales" departments are "located" in low tax nations.

    One can only hope that their expenses are given a thorough going over, at least the groundwork has been done in forcing them to appear and publicly disclose information. In lieu of this development, perhaps they'll even give El Reg a response to any questions they have? Perhaps that's asking a bit much...

  6. Winkypop Silver badge


    There no reasons.

    They do it because they can.

  7. Paul J Turner

    Wishful thinking

    I hope Ford, General Motors etc are worried.

  8. Tim99 Silver badge

    Goods & Services Tax

    Yes Simon, we who are fortunate to live in the Antipodes do often get ripped off. Some of this is because of our relatively small population, some of it is because of our long supply chain: As explained to me many years ago when I imported goods: a $100 item imported into Oz may have an importers markup of 30%, a distributer/wholesaler markup of 30%, then a retailers markup of at least 30%. Now adding local taxes could give a final price to the punter of ~$250. A direct import from an internet supplier including shipping would have the final price of ~$130 (At the moment, a personally imported item of less than $1000 has no tax payable).

    Now as for your Apple price: "An example of the discrepancy can be seen in the price of a 16GB WiFi iPad with Retina Display. In the USA the fondleslab costs $US499. In Australia it's $AUD539."

    As you say, the fondleslab punter pays AU$539; - Now using your numbers, in Oz we should pay US499/1.03 for currency difference = AU$484.46, add our 10% GST (Like VAT, but cheaper) and we get $532.91 - I think I could probably afford the 1.14% difference...

    1. Anonymous Coward
      Anonymous Coward

      Re: Goods & Services Tax

      That's one example. Here's another. The price for Windows Office Professional in the US is US$399.99.

      The cost for the same item in Australia is AU$599.00 (

  9. Ramazan

    Re: They have no factories here

    Typical with hunting - "because she is made of wood", same kind of logic. Of course they have no costs in Australia, but the product isn't made in Australia either.

  10. Moosey

    The one that really bugs me

    Is the digital download stuff, things like microsoft points for the xbox. depending on which site you go to the price changes, but they're region locked so unless you've got a proxy you're sh@t outta luck.

    Although to be fair oz really needs to get it's own house in order before moaning at the multi-nationals. WA is always more expensive than over east.

    Beer - cos over here it's AU$11 a pint :(

  11. Stephen 11

    Today's Engrish?

    While the Inquiry has in the passed expressed very keen interest...

    Passed? Really?

  12. Benjamin 4

    Sorry, so what's the outcome going to be. A committee will find that they pay more than other countries, and then what? They'll legislate that an iPad can only cost $500? Somehow I don't quite see it. The only way this can be resolved is through the market (i.e. another company comes along and starts selling a competitive product at lower prices).

    1. jonathanb Silver badge

      Allow / encourage parallel importing. Then people can buy a container load of fondleslabs in Hong Kong, ship them to Australia and sell them for less than the official channels.

      1. John Brown (no body) Silver badge

        "Allow / encourage parallel importing"

        Absolutely! It's a global market, or so our Govts and multi-nationals keep telling us. They can move their manufacturing and supply sources around the world, moVe the revenues and profits around the world but "they" won't let us buy from around the world. "grey imports", DVD region encoding etc. Bastards!

    2. Anonymous Coward
      Anonymous Coward

      Too much collusion

      There is too much collusion amongst the corporations for your suggestion to work. It's like politicians talking to lobbyists when no ones looking. It's hard to prove but we all know it happens.

      This is one of many reasons that right-wing politicians who push for smaller government and less regulation lose my trust. It becomes even easier for them to side with corporations to line their own pockets.

    3. Chad H.


      They can make recommendations to change the tax system... My suggestion would be to make money sent to parent and sister companies "Dividends" except where they actually reflect the true cost to the company above (no more buying an Item for 1, and selling it to overseas subidary for 10 to hide 9 profit from the taxman).

  13. Anonymous Coward
    Anonymous Coward

    EU won't ever do something alike...

    ... because higher prices means higher VAT as well.

    If IE of Media Player could have been taxed, they won't have asked to remove them from Windows.

    1. Chad H.

      Re: EU won't ever do something alike...

      Except of course, all the times that they have.

      Perhaps you should search this site for "Vivianne Redding"?

  14. Kevin Johnston

    Bandwagon anyone?

    I see there is an ever-growing number of countries starting to ask about these costs and transfer pricing and the like. If these global corporates are not careful we will see the various tax authorities come up with a global database to track the costs and see where the money is really going.

    All the double-dutch Irish sandwiches won't help if the tax-man sees Brownie points in re-interpreting laws/agreements to please their masters.

    1. Anonymous Coward
      Anonymous Coward

      Re: Bandwagon anyone?

      What we're seeing is simply governments getting desperate for more $$$ tax revenue so they can continue their ruinous ways with excessive spending. They see the political drawbacks in directly taxing voters, so they are scrabbling to find ways to tax people without all the noobs knowing that they're being taxed.

      This is so they can continue to play the generousity card, like "we're so generous giving you (insert special interest/victim/minority of some sort name as selected target of the month) all this money" without saying that it is so easy to look generous when giving away other peoples money.

      Because, companies don't "pay" the tax in the end, people pay taxes. So tax Apple (say) more, and some combination of customers, employees, and shareholders actually end up paying.

      You're all being fleeced, but because it's indirect you seem to think that you're not actually paying. It's a good trick while there are so many ignorant voters out there.

  15. Anonymous Coward
    Anonymous Coward

    Focus on Apple ?

    Apple have to physically ship products to Australia - have retail stores (hence local real-estate costs).

    Why not focus in the disparity of cost for online purchases - for software etc.

    Focus on Apple when it's down. How brave.

    1. ZeroP

      Re: Focus on Apple ?

      Apple sell software too. Apps. Music. Videos. They are just as guilty as Adobe and Microsoft.

    2. EddieD

      Re: Focus on Apple ?

      They have to shift the same goods to the USofA - the hardware is made in china, remember, so the delivery charge idea is specious.

      Software - all done over the internet via iTunes isn't it? Paid for by the customer.

      Try again...

    3. John Brown (no body) Silver badge

      Re: Focus on Apple ?

      "Apple have to physically ship products to Australia"

      Correct. Shipped from China. Surprisingly, China is closer to Australia than to the USA so by that logic those products ought to be cheaper in AU than USA.

      On the other hand, it's been shown that shipping goods around the world is actually a tiny amount of the total shipping costs. Most of the cost is the road and/or rail transport from the factory to the retailer. Or so the multinationals who ship food around the world instead of using local suppliers keep telling us

  16. The BigYin

    Not just Oz

    Thing ins the USA costs $999, how much does it cost in the UK?

    £650-ish? No, don't be stupid. It's £999 minimum.

  17. yossarianuk

    Linux is the same price.

    Kubuntu (everyone in our office is using this now), Ubuntu, Debian, Centos are all the same price....

  18. Anonymous Coward

    Its not merely Australia...

    When you go to the Microsoft online store you can buy software packages. A version of Visual Studio 2012 Professional here in Holland costs E 615,-. In the US however people pay merely $499,- for a copy.

    Its not Australia; its merely the way these companies work.

    1. Stratman

      Re: Its not merely Australia...

      Indeed it is, but unlike the corrupt financial black hole that is the EU, the Aussie gummint is doing something about it.

      1. silent_count

        Re: Its not merely Australia...

        While I appreciate your sentiment, Stratman, I think what we'll discover is that the gummint's idea of "doing something" and "holding an enquiry" are the same thing.

  19. David Hicks

    Apple were quite good on this I thought

    As a previous resident of Australia, yes most of the goods and services available to you over there are hysterically marked up and overpriced, with profits disappearing into the pockets of a variety of dodgy middlement, exclusive importers and (for some reason) retail real-estate barons. Most tech seemed to be double the price it was elsewhere. Cars were ludicrous!

    Apple, OTOH, seemed to sell at roughly the US price + GST, which seems fair enough.

  20. JaitcH

    Australians pay more for hardware and software than those overseas

    Don't know why they are complaining ... Europeans don't.

  21. Chad H.

    Bad examples

    The examples cited in the article aren't that great.... USD to AUD is basically at Parity, and the effect of GST simply seems to be ignored (Australian prices typically include taxes, US don't).

    16 GB WIFI iPAD

    $US499. In Australia it's $AUD539.

    Add 10% for GST onto 499 (so $49.90, but lets call it $50) and you get 549. The price is $10 cheaper!

    MS office 365 costs

    $AUD119 down under, but $US99.99

    Add 10% to 99.99 and you get 109.99. A mere $10. Not worth writing home about.

    Surely there are better examples out there that actually show the problem being complained about?

  22. Anonymous Coward
    Anonymous Coward

    Cheaper to fly to US and buy VS 2012 Ultimate there

    "A Choice investigation found that one Microsoft software development product Visual Studio 2012 Ultimate was so overpriced in Australia than an Aussie shopper could pay for return flights to Los Angeles, buy the software there and still come home thousands of dollars better off than buying it here."


  23. David Kelly 2

    Denial For Cost of Policies

    Those running the UK are smart enough not to hold this sort of monkey trial for fear of being outed. If Apple's hands are forced they will document exactly how government policy and regulations drive prices up.

    Cradle to grave nanny states don't come free, or even cheap.

  24. pingudownunder

    hahaha #auspol's self-importance strikes again


    As usual, those in Canberra who idolise their counterparts in the US and UK think that they have some sort of power over large multinationals such as Apple, Microsoft and Google.

    They forget that to these companies we are a little drop in the ocean. More people live in London, New York or Istanbul than in the whole of Australia.

    Australian Pollies, with their self-importance, is like an annoying scratch to these companies. What'll end up happening is that they'll withdraw from the Australian market, just to get rid of the annoyance. And who loses out ultimately? The customer.


  25. Stuart Duel

    Aim those pitckforks... Adobe - they are the kings of price gouging in Australia. Apple's prices are consistent with allowing for the small differences required for localisation, taxes and shipping small numbers of boxes into a small market sitting on a huge and sparsely populated continent.

    Adobe has no excuses for their blatant rip offs especially the price of their downloaded software - no packaging, no localisation, no media, no local hosting and no local support staff.

    Apple's testimony should put Adobe in a tight spot.

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