A Report into IT Pricing

4 September 2013

Why are IT products more expensive in Australia and what is being done about it?

The federal government’s House Standing Committee on Infrastructure and Communications has released the report of its inquiry into IT pricing At what cost? IT pricing and the Australia tax. The terms of reference required the committee to investigate “whether IT products sold in Australia are more expensive than those sold in comparable overseas jurisdictions and, if so, how much more expensive; why any such differences may exist; the impacts price differences may have on Australian consumers and businesses; and what actions, if any, may be taken to mitigate those impacts on Australian consumers.”

The report found that in many cases “prices are significantly higher than what might be expected as a consequence of any costs arising from delivery in the Australian market” and outline the impacts of this.  

The report includes discussion of Autodesk, Adobe and Microsoft products being significantly more expensive in Australia than elsewhere – for example, based on submissions, the committee found that “Adobe products showed an average difference of 42%, with a median difference of 49%; Microsoft products were on average 66% more expensive, with a median difference of 67%, and Autodesk products were on average 51% more expensive, with a median difference of 46%.” These price differences effectively increase the cost to architects doing business in Australia.

The Committee comments that although certain factors might lead to higher costs for IT suppliers “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.”

The report recommends changes to the Competition and Consumer Act and the Copyright Act, including investigating the feasibility of amending the Competition and Consumer Act so that contracts or terms of service that seek to enforce geoblocking are considered void. As a last resort it suggests a ban on geoblocking.

This item was first published in ACA Communique, September 2013.

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