Tech Giants Could Be Subpoenaed Over Aussie Digital Music Pricing

on in Industry News, Local News


Tech Giants Could Be Subpoenaed Over Aussie Digital Music Pricing

As previously reported, the Australian Government announced last May that they’d be making a formal parliamentary inquiry into the cost of digital pricing policies among large computer firms, like Apple, Microsoft, and Adobe, inviting the technology giants to defend their pricing policies which have been called into question over the rising strength of the Australian dollar.

Including the price of digital music through services like Apple’s iTunes, which compared to US and international markets was treated to a distinctive mark-up.  Because who decides the prices of the digital music store? Apple does.

A recent report from The Agenow suggests that the same technology titans could be forced to hand over internal information and documentation after refusing to appear at a Federal Parliamentary hearings this week.

Committee member and Labor MP Ed Husic is part of the Parliamentary inquiry into the digital pricing, and has attacked the computer companies saying they had “treated the Parliament with contempt.” Husic added that he would be prompting the committee to pass a motion to subpoena documents pertinent to the inquiry, “it will certainly include emails and any information that was exchanged,” added Mr. Husic.

The wanted information included documents exchanged between Apple, Microsoft, Adobe and the Australian Information Industry Association (AIIA) which appeared before the inquiry on behalf of the tech companies.

While Microsoft and Adobe have provided submissions to the inquiry, iTunes proprietors Apple demanded that theirs was kept confidential.

“Given the failure to co-operate, and since the major players are hiding behind their own industry association, I think we do need to see the documents exchanged between [them], Microsoft, Apple, Adobe and whoever helped prepare the [association's] submission to the IT inquiry,” said Mr Husic.

The Sydney MP has been campaigning hard for an expose on digital pricing policies, since the inquiry was first assembled in May, saying at the time that when IT companies were pressed about “why they charge so much for downloads, even they found the answers were not persuasive.”

Another group who have been lobbying hard for the investigation are CHOICE, a leading advocate for consumer rights in Australia, who have previously stated: ‘CHOICE believes excuses used by multinational companies to justify higher prices, especially with regard to products downloaded from the internet, are largely unjustified.”

They have aided the inquiry through appearing before hearings, saying that Australians generally pay more than 50% above US prices for music downloads, games, software and other products. They added that they “hope [the inquiry] will pressure importers, distributors and retailers to pass on some of the savings they are enjoying thanks to the strong Australian dollar.”

Committee chairman Nick Champion has also noted the frustration of the tech companies’ refusal to appear at hearings, adding that they consistently avoided answering specific questions, including ignoring the two written invitations from the Parliamentary inquiry.

“Obviously it’s an issue of concern, we want to be able to gather the maximum amount of evidence when we’re examining this issue,” said Mr Champion, adding that the Department of the House of Representatives have granted the committee power to summons documents and witnesses, as well as being able to issue penalties for disobeying any requests.

The inquiry will no doubt help expose – or at the very least enlighten the general public – as to the pricing policies for digital music, which at this stage – to put it bluntly – appears to be ripping off Australian consumers. iTunes being the worst culprit, regularly up-marking an additional 40% to 50% on top of the required 10% GST.

Regular defences cited by Apple and similar digital distributors is that digital music is not delivered by a global agreement, deferring to a sticky web of music licensing and tax costs to justify their fees. But arguments have been made that sparing up music by territories is no longer a valid excuse.

A report from the Productivity Commission last year into retail, revealed that a hollow pretexts like the size of the Australian market “in most cases are not persuasive, especially in the case of downloaded music… where the costs of delivery to the customer are practically zero and uniform around the world.”


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