Don't regulate Aussie tech prices: Treasury

By Allie Coyne on Nov 1, 2012 8:16 AM
Filed under Hardware

Gouging costs '$10bn' a year, but don't worry.

The Federal Treasury has warned against regulating the price of technology products in Australia, despite repeated claims that local vendors are gouging buyers.

The parliamentary committee investigating local price discrimination last night heard from Treasury and the Australian Competition and Consumer Commission (ACCC). 

The inquiry was formed in May following committee member and MP Ed Husic’s ongoing campaign against perceived price discrimination on IT products.

Treasury representative Geoff Francis told the committee that regulating local prices could slow local innovation and competition. He said the issue of price gouging was not new but had been highlighted by the rise of online retail.

“We’d be very wary of more interventionist measures that seek to dictate the terms on which consumers and business transactions take place,” Francis said.

“We believe that they may stifle innovation and reduce competition further. In other words they may be counter-productive.”

He backed vendor claims that GST, shipping costs, regulatory requirements, warranties, rent, labour costs and economies of scale affected local prices, and said customers were only being charged what they could afford. 

The ACCC agreed further regulation was not necessary, saying current law afforded it the ability to investigate anti-competitive behaviour. It said it had "a lot of power" and "didn’t need any more". 

But Husic accused Treasury and the ACCC of giving technology vendors an excuse to remain inactive.

“[The Treasury submission] was just an excuse for us to accept continued, persistent abuse of market power exercised via price discrimination that is costing the Australian economy over $10 billion in the next year,” he said.

"You dont think that warrants any sort of action in terms of reviewing legislation?"

The committee earlier this week told Parliament it would be forced to subpoena the likes of Apple, Adobe and Microsoft to the inquiry due to the trio's unwillingness to cooperate.

Husic first raised the possibility of issuing subpoenas in mid September. He slammed IT vendors as having a total disregard for their customers, but said they would be offered one more chance to contribute openly to the public discussion before a summons was considered.

He told CRN last month that vendors had exhausted their last opportunity to voluntarily participate, and the committee would look at forcing the companies to appear and hand over internal documentation. 

“If companies like Woolworths and Coles can appear before a parliamentary committee, and even the late Kerry Packer can appear before a parliamentary committee, these companies should also be able to,” he said.

To date, the committee has received 93 submissions, from consumers and resellers alike.

Apple made a private submission to the inquiry and has refused to publicly engage with the committee.

Microsoft provided a public submission but has declined to be involved further, while Adobe has offered several submissions, including through vendor representative body the AIIA, and last week said it will only participate in public hearings if other vendors do so.

 
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