Tech giants Apple, Microsoft, Adobe to be dragged before IT price inquiry

After months of deliberations and refusals to appear before the Federal Parliament’s probe into IT pricing, tech giants Apple, Adobe and Microsoft have been summoned to appear before the inquiry and its board.

Federal Labor MP Ed Husic, a leading inquiry proponent and parliamentary committee member, confirmed the three companies had been summoned, with all three expected to appear on March 22. Even Tony King, Apple’s rarely seen local chief executive, is expected to make an appearance.

The inquiry has been a point of interest for business, which regularly pays more for enterprise-grade technology than users in other countries.

“This is the most serious step that a parliamentary committee can take,” Husic told The Australian Financial Review. “They shouldn’t send the wrong message by defying Parliament.”

So far, the three companies – regularly identified as some of the worst offenders when it comes to IT price gouging – have refused to answer questions in public. Apple was granted an off-record hearing, while Adobe and Microsoft have provided written submissions.

But the companies have never appeared publicly, only serving to bolster their reputation as price gougers. And now, the IT industry and consumer advocates say the summonses are a just reward for the companies’ delays.

Choice, which has been a strong proponent for the inquiry, said in a statement the organisation welcomes the move.

“Choice is also calling on the committee to take other actions to reduce prices in Australia,” it said, recommending the federal government investigate whether the price differences are even anti-competitive.

Telecommunications analyst Paul Budde says while the investigation may not go as far as forcibly reducing prices, the fact the companies will appear in public is a good first step.

“It’s clear that in a lot of situations, prices in Australia are significantly more for the same products than in the United States,” he says.

“While it may not have all the full powers to make them change prices, the inquiry puts attention on the companies that are to an extent ripping off customers.”

“By doing so, you are already going to influence the activities of these companies anyway, so it’s definitely worth doing.

Apple, Adobe and Microsoft were contacted for comment this morning, but none were available prior to publication. Husic was also contacted, but was unavailable.

So far the IT inquiry has received a number of submissions, with a wide range of views. While consumer advocacy groups say IT businesses are ripping off customers, the IT firms themselves say higher prices are necessary for the higher cost of doing business in Australia.

However, experts have pointed out this isn’t always the case. Although Apple has reduced its prices over the last few years to reflect international standards, prices for apps and music still exceed those in the United States. In some cases, prices can be as much as 50% higher.

Adobe fans were disappointmented last year when the company said its new software package would cost several hundred dollars more for local users – even when those products were distributed digitally.

A Productivity Commission inquiry into the retail industry found the explanations for price differences were “not persuasive”, especially when those products are distributed over the internet.

Budde says while it’s still up in the air as to how much the inquiry will achieve, the hearings will provide valuable insight.

“It’s well worth doing, even if the whole legal issue itself is questionable.”