Consumer Group Choice Assails Gov't Policy on High Prices of IT Products
Consuming electronic and digital products in and within Australia has remained relatively expensive compared to other markets, with the price mark-ups reaching an average of 50 per cent more, according to a consumer advocacy group.
From gadgets, softwares to music and movie downloads, Australian consumers pay a lot more that what an average U.S. buyer would shell out, Choice campaign chief Matt Levey told The Brisbane Times on Wednesday.
The group is angered by the signals being sent out by federal authorities regarding the issue, which was contained in the recent filing by the Treasury before the Parliamentary IT Inquiry that said: "Treasury considers that the current competition laws are capable of addressing anti-competitive conduct without the need for a specific price discrimination prohibition."
Choice has insisted that the federal government cannot just sit around and wait for market forces to do the job for them while tech companies and online retailers make a killing at the expense of Australian consumers.
Canberra should at least check on the 'geo-blocking and region-coding' practices by web retailers, which rejects attempts by Aussie buyers to make purchases instead on international sites to circumvent the exorbitant IT goods pricing in Australia.
These tactics should be investigated in order to ascertain that they do not constitute anti-competitive acts, Choice said.
Tech companies, specifically the giant ones, Fairfax said, have largely sidestepped calls for them to shed light on the perceived pricing discrimination inflicted on Australian IT consumers and have dodged active participation to the ongoing legislative probe.
And those who did merely pointed to market dynamics and a host of business operational considerations as key reasons for higher IT products pricing in the country, claims that were rebuked by the Productivity Commission.
But the commission's separate submission was generally magnanimous for the consumers and the online retailers as well.
While it scored the excuse forwarded by the tech firms on the unreasonably high prices for their products, the commission allowed too that "that Australia's trade routes can be more expensive than those for other countries."
Add to that, the Treasury said, the high value of the local currency, which creates the condition where imported goods, tech products including, were priced much cheaper.
The Treasury also noted on its submission that while Australian buyers were made to bear the high price tag on tech products, these levels were not considered as the most expensive.
Over time, the government office is convinced that such price levels will "generally decline over time, providing there is sufficient competitive pressure or low barriers to entry."
The Treasury submission also discounted the possibility of Canberra adopting "more interventionist measures," as the resort may actually backfire in the form of weak competition environment and the proliferation of products that were bereft of innovations.
The best policy for now is to allow tech firms and vendors to determine the retail price levels of the product that they offer, the government said.
Choice, however, is adamant on its position that the Treasury fell short on its duties.
"It's not so much the inquiry which is the problem, but how the government responds," Mr Levey told Fairfax.