Why the IT price inquiry summons may not mean answers

By Allie Coyne on Feb 13, 2013 12:08 PM
Filed under Hardware

Microsoft, Adobe and Apple could still avoid scrutiny.

The nine-month long parliamentary investigation into the pricing structures of technology vendors operating in Australia is finally coming to a head after the committee investigating the issue issued summons to Microsoft, Adobe and Apple.

The summons forces the three tech giants to appear at a public hearing in Canberra in late March - something all three had previously resisted.

The trio until now had very limited involvement with the inquiry, with Microsoft and Adobe both entering a submission but refusing to front a public hearing, and Apple requesting a private meeting with committee members.

As such, little light has thus far been shed on why prices for specific comparable hardware and software products are significantly higher in Australia than the US.

So what does the summons mean for transparency?

Australian parliamentary committees have the same power as the courts to punish those found to be in contempt and who interfere with the committee’s objective. According to the House of Representatives, corporations who are summoned to appear before a committee but who refuse to attend may be punished for contempt.

Importantly, those summoned before a committee who do not answer a question, produce a document, or lie/mislead the committee are similarly liable for punishment. Witnesses can only refuse to answer questions or produce documents on the grounds it may incriminate them. 

Parliamentary privilege means any documents submitted to the committee are protected from being republished under the Parliamentary Privileges Act 1987. Additionally, the material can’t be used against those who submitted it in legal proceedings. 

The result? Microsoft, Adobe and Apple will likely turn up on March 22 and be forced to credibly answer questions relating to their pricing structures or risk punishment. 

But they also may not. As stated under the Parliamentary Privileges Act 1987, corporations found to be in contempt can be punished by a fine of just $25,000.

The three companies have vast warchests to combat action against them. Apple has a cash pile of $137 billion, Microsoft has $63 billion cash in the bank, and Adobe is sitting on $3.5 billion.

Any or all of the three companies could choose to bear the brunt of the repercussions of being found in contempt and continuing operating as they have been.

Microsoft and Adobe did not return request for confirmation on their attendance. Apple said it would not comment on matters involving the inquiry.

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