The three global technology behemoths at the centre of the Australian Government’s inquiry into IT pricing locally have exhausted their last opportunity to voluntarily participate in hearings.
Microsoft, Adobe and Apple have been given multiple opportunities to become involved in the inquiry, according to Federal Labor MP and IT price inquiry panel member Ed Husic, but have squirmed out of the process by hiding behind their global operations.
The price inquiry was launched in May as a result of Husic’s ongoing campaigning against what he called discriminatory pricing practices by technology vendors locally. The committee was formed to investigate the differences between hardware and software prices in Australia compared to the overseas.
To date, the committee has received 93 submissions, from consumers and resellers alike. Microsoft is the only vendor to have made a public submission. Apple requested a closed-door, private hearing with the panel members, while Adobe indicated its entry formed part of the submission put forward by vendor representative body the Australian Information Industry Association.
Husic told CRN the companies had been contacted again two weeks ago to appear at hearings, with Tuesday of last week the deadline for response. He said none had taken up the option.
Husic said the committee’s next step is to request internal documentation from the vendors outlining the factors causing higher local pricing.
He said the committee would have the power to subpoena the vendors to appear and hand over information, should the vendors not respond positively to the request. He said a refusal of a subpoena would result in penalties.
“We’re hoping we don’t get to the penalty stage. It’s pretty serious to ignore a direct parliamentary request,” he said. “If they do, it will be rare and potentially a first for these companies to defy a committee. We’re hoping they will gauge from the actions taken to this point that the committee is very serious about the issue.”
“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.”
Adobe fights back
But software giant Adobe contradicted Husic’s claims, saying it has been involved in the inquiry since it was launched.
Adobe confirmed to CRN it had provided information to the committee following a request for further information in mid September. In relation to last week’s committee request to attend a public hearing, an Adobe spokesperson said the company was unable to attend due to short notice, and it believed there was nothing further to add on its previous submission.
It said it is considering a further request to publicly appear at a hearing.
Neither Apple or Microsoft responded to request for comment by the time of publication.
Husic and the committee want evidence from the tech vendors that retailing in Australia is more costly than other regions. The vendors have previously cited a variety of factors including GST, shipping costs, regulatory requirements under Australian Consumer Law, “strict” warranties, rent, labour costs, economies of scale, as well as marketing and advertising, for higher Australian pricing.
Husic said there was no reason the vendors should not be able to outline each factor contributing to higher local costs.
“All of that is a smoke screen. When you are asked why it costs more for a digital download here compared to overseas, and the answers aren’t forthcoming, you have to ask why," he said. "The reason there is such great resistance is these companies are engaging in price discrimination and they set the price based on what they reckon the market can bear. They’ve been trying to get away with it for a while to maximise their profit."
“The bulk of hardware is not manufactured in Australia, the bulk of cost associated with the production is borne elsewhere, so it really comes to after sales service,” he said. “And if they are saying costs are tied up in after sales service you have to worry about the quality of the product that demands so much servicing.”
The committee met last night to discuss the next step. Husic said he would suggest summoning the tech vendors and their internal documents to the inquiry. Husic was not available for comment this morning.
Husic first raised the possibility of subpoenaeing the vendors to the inquiry in mid September. Addressing the Global Access Partner’s Annual Growth Summit in Parliament House, Husic 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.