Apple Questioned By Australian Parliament Over “Price Gouging”

For those living in the US and who think that Apple’s products are already expensive, you might want to rethink that stance because in countries such as Australia, Apple’s products are even more expensive despite the Australian dollar being valued higher compared to the USD (AUD1 = USD1.0445). To that extent many are wondering why in spite of that, Apple Australia and other companies such as Microsoft and Adobe are charging higher prices than their US counterpart. That question is currently being asked in an Australian Parliament inquiry where executives from Microsoft, Adobe and Apple were called to explain their “price gouging” practices.

While Microsoft and Adobe have their own reasons, according to Apple, the reason why movies and music is priced higher in Australia (on iTunes, presumably) is not because Apple is trying to rip customers off. Instead it seems that Apple is trying to say that content providers, i.e. record labels and movie studios, are the ones who are demanding higher prices for regions such as Australia and Apple is merely complying with their requests.

According to Apple’s VP For Australia, New Zealand and South Asia, Tony King, “The pricing of this digital content is based on the wholesale prices which are set through negotiated contracts with the record labels, movie studios and TV networks […] The content industry still runs with perhaps old-fashioned notions of country borders or territories or markets.” King went on to point out that Apple’s own prices in the iTunes App Store is in line with other App Stores around the world, using it as proof that Apple is not trying to take advantage of its customers.

We’re not sure what will become of this inquiry, or if it will ultimately affect the prices that Australians pay for Microsoft, Adobe and Apple products, but it’s good to see that these big companies are being called to account for their decisions.

Tyler Lee
Categories: Apple
Tags: Apps, iTunes, Legal