Here’s Why Apple is in Trouble Down Under
Apple (NASDAQ:AAPL) is among three companies to have received subpoenas to be present at a March 22 public hearing of the Australian government and address allegations of unfair pricing practices. Australia’s House Committee on Infrastructure and Communications summoned Apple, along with Adobe (NASDAQ:ADBE) and Microsoft (NASDAQ:MSFT), to explain why their products sell at a much higher premium in that country compared to international prices.
The probe first launched in July last year.
“The Committee is looking at the impacts of prices charged to Australian consumers for IT products — Australian consumers often pay much higher prices for hardware and software than people in other countries,” the summons read.
According to Australian Member of Parliament and inquiry head Ed Husic, Apple, Adobe, and Microsoft have continued to defy calls for answers over several months and refused to appear before the committee. The companies simply end up blaming each other for not appearing, he said. “It’ll be interesting to hear specifically how all three companies defend their practices — particularly with regards to the pricing of digital products,” Husic told Kotaku Australia.
According to Reuters, a 16GB WiFi iPad with Retina display sells for Australian Dollar 539, $40 above the price in the U.S. Microsoft’s Office 365 Home Premium, meanwhile, costs Australian Dollar 119 against $99.99 in the United States. The Australian currency is currently stronger than the American dollar. Other companies and IT firms have earlier put the blame on high operating costs in Australia, including high local wages and conditions, and import costs.
These were just excuses, Husic said. “For some time consumers and businesses have been trying to work out why they are paying so much more, particularly for software, where if it’s downloaded there is no shipping or handling, or much of a labor cost,” he told Reuters. Husic also criticized Apple last week over payment of local taxes and accused its executives of maintaining a “cloak of invisibility.”
Not appearing at the hearing may result in contempt of parliament charges, fines, or jail terms.
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