Microsoft, Apple Subpoenaed For Price Gouging?

Tech giants could be called before parliament on the IT price gouging enquiry a senior MP has warned.

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Labor MP Ed Husic, who is one of the main drivers behind the enquiry into IT pricing in Australia, raised the notion of issuing the likes of Microsoft, Adobe and even Apple with subpoenas, forcing them to answer before The House of Representatives Standing Committee on Infrastructure and Communications inquiry, if they don’t up their game.

“I believe the inquiry will be forced to confront the prospect of subpoenaing major vendors to provide greater detail to justify the price discrimination being levelled at Australian businesses — and something more substantive than a one to five-page submission,” he said.

Husic, a MP for Chifley, made the comments at the Global Access Partners’ Annual Growth Summit on Friday, reports The Australian.

Husic, who has campaigned extensively on the seemingly major price disparities between consumer goods like iPhones, iPads and  Microsoft Office and Adobe Creative software compared to overseas, also hit out at the tech giants “total disregard” and “contempt” for the parliamentary backed inquiry, in his speech Friday.

 “It’s even harder to get this data when the major vendors refuse to engage with the inquiry, treating the parliament with contempt,” Husic declared.

The IT pricing inquiry was established in May following a request from the Minister for Digital Economy, Senator Stephen Conroy. However, it appears the inquiry is well within its powers to issue the tech companies with subpoenas, a spokesperson for Mr Husic’s office told SmartHouse

However, Mr Husic, who is also on the committee inquiry, said he would discuss the issue with his colleagues in Canberra tomorrow, but issuing subpoenas is likely to be a last option and vendors will be given another chance to attend hearings and respond to the issue, which have already taken place, most recently in Sydney in July.

IT companies including Microsoft and Adode and others made submission through the Australia Industry Group (AiG) and the Information Industry Association (AIIA), both groups which Husic also criticised.

Microsoft made a separate three page submission to the IT pricing inquiry earlier this year, and blamed the “cost of doing business in Australia having a direct impact on the prices” being charged. High labor costs, rent shipping and transport were among the costs cited. Adobe also made a separate one page submission, which Husic also condemned earlier this year.

In a damning statement of the IT industry bodies, Husic hit out at this ‘higher costs in OZ’ argument, made by the AIIA and AiG:

“The issue with software is baffling because, with downloads, things such as shipping and handling costs are almost negligible,” said the Labor MP.

“The Ai Group gave the nod to the usual litany of underpinning factors driving up costs: rents, labour, taxes, warranties, environmental regulation. Mind you, no quantitative data was presented to explain price differences of between 60 per cent and 80 per cent, especially for software downloads.”

He also said the AIIA argument that the market should fix the price gouging by industry players was “revelatory” as it was the companies themselves pushing consumer mark ups on goods in the first place.

Numerous submissions have been made – 91 in all – by members of the public, IT companies, the consumer watchdog Choice, the Department of Communications and The Treasury.

Apple who does big business in Australia also chose not to make a submission separate from the industry led one.
 
SmartHouse contacted both Adobe and Microsoft and is awaiting a response.