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Clash of the titans: Apple, Adobe, and Microsoft under fire at IT pricing inquiry
http://theconversation.com/clash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878[22/03/2013 4:34:29 PM]
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Clash of the titans: Apple,Adobe, and Microsoft underfire at IT pricing inquiry
22 March 2013, 3.39pm AEST
AUTHOR
DISCLOSURE STATEMENT
Dr Matthew Rimmer is an AustralianResearch Council Future Fellow, working onIntellectual Property and Climate Change. Heis an associate professor at the ANU Collegeof Law, an associate director of the AustralianCentre for Intellectual Property in Agriculture(ACIPA), and a member of the ANU ClimateChange Institute. Dr Matthew Rimmerreceives funding as an Australian ResearchCouncil Future Fellow working on "IntellectualProperty and Climate Change: InventingClean Technologies" and a chief investigatorin an Australian Research Council DiscoveryProject, “Promoting Plant Innovation inAustralia”.
The Conversation is funded by CSIRO,Melbourne, Monash, RMIT, UTS, UWA,Canberra, CDU, Deakin, Flinders, Griffith, LaTrobe, Massey, Murdoch, Newcastle. QUT,Swinburne, UniSA, USC, USQ, UTAS, UWSand VU.
Today, an Australian parliamentary committee grilled the IT
titans – Apple, Adobe, and Microsoft – on price discrimination
against Australian consumers. The IT companies were
evasive under questioning.
The House of Representatives Committee on
Infrastructure and Communications issued a summons to
Apple, Adobe, and Microsoft to appear before the
Parliament.
The Committee is investigating the impacts of prices charged
to Australian consumers for IT products. The Committee has
been examining claims by consumer advocates CHOICE
Australia and the Australian Communications Consumer
Action Network that Australian consumers have been the
victims of price gouging.
TAGS
Software, IT pricing
RELATED ARTICLES
Microsoft, along with Adobe and Apple, faced a parliamentary committee about pricediscrimination of IT products. AAP
Matthew RimmerARC Future Fellow andAssociate Professor inIntellectual Property
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Clash of the titans: Apple, Adobe, and Microsoft under fire at IT pricing inquiry
http://theconversation.com/clash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878[22/03/2013 4:34:29 PM]
Choice Australia talks about IT Price Discrimination: Sunrise
Choice Australia talks about IT Price Discrimination: The Today Show
The inquiry into IT pricing has grown into a larger public
debate about copyright law, consumer rights, and competition
in the digital economy. Harrison Polites has observed that
the Labor member for Chifley, Ed Husic, has transformed the
inquiry into “a debate in microeconomics that has significant
implications for Australia’s national economy”.
Apple’s cloak of invisibility
Husic has said that Apple has sought to hide under “a cloak
of invisibility” in a number of Australian policy debates.
With some reluctance, Apple’s written submission was
published. At the IT pricing inquiry, Apple Australia vice-
president Tony King blamed copyright rights-holders for
price discrimination in Australia. However, the relationship
8 March 2013Big fine for a brokenpromise: Microsoft’santitrust breach puts techfirms on notice
27 February 2013Smash the machine: digitalmonopolies havetrapped you
23 November 2012When the price is not right:technology price gougingin Australia
21 December 2011Something about Siri: hasthe iPhone virtual assistantbecome the Apple ofour eye?
http://www.businessspectator.com.au/article/2013/2/12/business-spectator/technology-spectator-tech-giants-face-music#ixzz2O39Uylighttp://www.adelaidenow.com.au/technology/smartphones/apple-to-be-slapped-with-hefty-tax-bill-by-ato/story-fn5tich0-1226571571083http://theconversation.com/h//www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=ic/itpricing/subs/sub062.pdfhttp://theconversation.com/h//www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=ic/itpricing/subs/sub062.pdfhttp://www.itnews.com.au/News/337434,apple-australia-passes-the-buck-in-price-inquiry.aspxhttp://www.theage.com.au/digital-life/digital-life-news/apple-blames-rights-holders-for-70-markups-20130322-2gjkr.htmlhttp://www.theage.com.au/digital-life/digital-life-news/apple-blames-rights-holders-for-70-markups-20130322-2gjkr.htmlhttp://theconversation.com/big-fine-for-a-broken-promise-microsofts-antitrust-breach-puts-tech-firms-on-notice-12683http://theconversation.com/big-fine-for-a-broken-promise-microsofts-antitrust-breach-puts-tech-firms-on-notice-12683http://theconversation.com/big-fine-for-a-broken-promise-microsofts-antitrust-breach-puts-tech-firms-on-notice-12683http://theconversation.com/big-fine-for-a-broken-promise-microsofts-antitrust-breach-puts-tech-firms-on-notice-12683http://theconversation.com/big-fine-for-a-broken-promise-microsofts-antitrust-breach-puts-tech-firms-on-notice-12683http://theconversation.com/big-fine-for-a-broken-promise-microsofts-antitrust-breach-puts-tech-firms-on-notice-12683http://theconversation.com/smash-the-machine-digital-monopolies-have-trapped-you-12496http://theconversation.com/smash-the-machine-digital-monopolies-have-trapped-you-12496http://theconversation.com/smash-the-machine-digital-monopolies-have-trapped-you-12496http://theconversation.com/smash-the-machine-digital-monopolies-have-trapped-you-12496http://theconversation.com/smash-the-machine-digital-monopolies-have-trapped-you-12496http://theconversation.com/when-the-price-is-not-right-technology-price-gouging-in-australia-10582http://theconversation.com/when-the-price-is-not-right-technology-price-gouging-in-australia-10582http://theconversation.com/when-the-price-is-not-right-technology-price-gouging-in-australia-10582http://theconversation.com/when-the-price-is-not-right-technology-price-gouging-in-australia-10582http://theconversation.com/when-the-price-is-not-right-technology-price-gouging-in-australia-10582http://theconversation.com/something-about-siri-has-the-iphone-virtual-assistant-become-the-apple-of-our-eye-4817http://theconversation.com/something-about-siri-has-the-iphone-virtual-assistant-become-the-apple-of-our-eye-4817http://theconversation.com/something-about-siri-has-the-iphone-virtual-assistant-become-the-apple-of-our-eye-4817http://theconversation.com/something-about-siri-has-the-iphone-virtual-assistant-become-the-apple-of-our-eye-4817http://theconversation.com/something-about-siri-has-the-iphone-virtual-assistant-become-the-apple-of-our-eye-4817http://theconversation.com/something-about-siri-has-the-iphone-virtual-assistant-become-the-apple-of-our-eye-4817
Clash of the titans: Apple, Adobe, and Microsoft under fire at IT pricing inquiry
http://theconversation.com/clash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878[22/03/2013 4:34:29 PM]
between Apple and copyright owners has been competitive —
and sometimes collusive.
Apple has been under investigation for its collaboration with
publishers on setting e-book prices both in the United States
and the European Union. Tim Cook, the chief executive of
Apple, has been ordered to testify in the United States
case.
The Department of Justice action against Apple on e-book price fixing
One has to wonder whether Apple has sought to collaborate
copyright owners in price-setting in Australia.
CHOICE Australia has observed disparities in pricing on
iTunes between Australia and the United States. Rihanna’s
latest album Unapologetic costs A$22.99 in the Australian
iTunes store, but only $15.99 in the United States.
Australian fans of the Boss, Bruce Springsteen– such as
the Treasurer Wayne Swan – would pay $AU16.99 for his
Greatest Hits on iTunes, whereas purchasers Born in the USA
would only pay $US11.99. Matthew Levey from CHOICE
Australia wondered: “Why is it costing Australians 70% more
to rock out to AC/DC’s Back in Black on iTunes?”
Parliamentarian Paul Neville was particularly aggrieved about
the high cost of the works of Led Zeppelin on Australia’s
iTunes.
Stephen Jones MP raised questions about whether Apple was
2 November 2011Do patents create softwareinnovation? Computersays no
http://www.businessweek.com/news/2013-03-08/apple-ceo-may-testify-in-justice-department-s-e-books-suithttp://t.co/bOyx7Vex2Dhttp://www.ft.com/cms/s/0/7068bc16-8c2f-11e2-b001-00144feabdc0.htmlhttp://www.ft.com/cms/s/0/7068bc16-8c2f-11e2-b001-00144feabdc0.htmlhttp://www.businessweek.com/news/2013-03-21/rihanna-costing-49-percent-more-as-australia-probes-apple-musichttp://www.businessweek.com/news/2013-03-21/rihanna-costing-49-percent-more-as-australia-probes-apple-musichttp://www.businessweek.com/news/2013-03-21/rihanna-costing-49-percent-more-as-australia-probes-apple-musichttp://www.smh.com.au/technology/technology-news/getting-to-the-bottom-of-great-tech-ripoff-20120803-23krt.htmlhttp://www.news.com.au/technology/biztech/watchdog-choice-has-tough-questions-for-apple-microsoft-and-adobe/story-fn5lic6c-1226602766888http://www.news.com.au/technology/biztech/watchdog-choice-has-tough-questions-for-apple-microsoft-and-adobe/story-fn5lic6c-1226602766888http://theconversation.com/do-patents-create-software-innovation-computer-says-no-3808http://theconversation.com/do-patents-create-software-innovation-computer-says-no-3808http://theconversation.com/do-patents-create-software-innovation-computer-says-no-3808http://theconversation.com/do-patents-create-software-innovation-computer-says-no-3808http://theconversation.com/do-patents-create-software-innovation-computer-says-no-3808
Clash of the titans: Apple, Adobe, and Microsoft under fire at IT pricing inquiry
http://theconversation.com/clash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878[22/03/2013 4:34:29 PM]
a dominant market power in the IT field, much like Woolworths
in agriculture. King denied that Apple was like Woolworths.
He suggested that Apple was comparable to JB Hi-Fi, much
to the scepticism of the committee.
Adobe’s acrobatics
In contrast to Apple, Adobe sought to deflect criticism of its
pricing in the Australian policy debate.
Adobe’s managing director Paul Robson appeared before
the committee, and failed to justify why Australian
consumers paid higher prices for software. At one point, he
suggested Australians could fly to the United States, if
they wanted cheaper prices of boxed Adobe products.
Elsewhere, Adobe’s chief executive, Shantanu Narayen, has
defended the software prices in Australia. He has
maintained: “You always have to look at different pricing in
different regions and we do the research just like other
companies … We look at the appropriate pricing and the
value associated with products everywhere.”
Under pressure, Adobe announced that it would cut its
Australian prices in respect of cloud-based software services
the Creative Cloud.
However, Adobe has come under attack for making token
concessions in the IT Pricing debate. Such statements
have been seen as a public relations smokescreen.
Adobe CEO refuses to answer Australian pricing questions
CHOICE Australia CEO Alan Kirkland said: “If Adobe was
genuine about treating consumers fairly, it would have
http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=ic/itpricing/subs/sub081.pdfhttp://t.co/86lIQHji75http://t.co/86lIQHji75http://www.heraldsun.com.au/opinion/no-good-answer-on-the-great-aussie-rip-off/story-fnh4jt62-1226603328421http://www.computerworld.com.au/article/457033/adobe_fly_us_cheaper_software/http://www.afr.com/p/technology/tech_giants_will_have_to_cut_prices_daDpoGUkeNPlmAKglJC5NLhttp://www.afr.com/p/technology/tech_giants_will_have_to_cut_prices_daDpoGUkeNPlmAKglJC5NLhttp://www.businessspectator.com.au/news/2013/2/13/technology/adobe-cloud-product-price-drop-sees-australians-pay-slightly-less-ushttp://www.businessspectator.com.au/article/2013/2/15/business-spectator/technology-spectator-adobes-pricing-smokescreenhttp://www.businessspectator.com.au/article/2013/2/15/business-spectator/technology-spectator-adobes-pricing-smokescreenhttp://www.choice.com.au/media-and-news/consumer-news/news/parliament-summons-tech-giants.aspx
Clash of the titans: Apple, Adobe, and Microsoft under fire at IT pricing inquiry
http://theconversation.com/clash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878[22/03/2013 4:34:29 PM]
reduced prices across all of its products.”
Adobe has been reliant upon technological protection
measures, digital locks, and geoblocking. Husic suggested
that Adobe took a medieval approach to IT pricing, with
“regional fiefdoms”. Stephen Jones MP commented that
Adobe “digitally handcuffed” its consumers.
Adobe threatened that if geoblocking was prohibited in
Australia, it would reconsider its willingness to invest in local
IT.
The Microsoft monopoly
The United States multinational software company Microsoft –
founded by Bill Gates and Paul Allen – made a written
submission to the inquiry. Microsoft’s Pip Marlow
appeared before the inquiry.
CHOICE Australia has been damning about prices charged
by Microsoftin Australia compared to the United States:
“Software is another product that is broadly the same
regardless of where it is sold, yet still attracts price
differentials.” Microsoft’s Office Professional 2013 software
package costs A$599 to download in Australia, but merely
$399.99 at the United States Web store.
http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=ic/itpricing/subs/sub067.pdfhttp://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=ic/itpricing/subs/sub067.pdfhttp://www.itnews.com.au/News/337464,microsoft-to-aussies-well-charge-what-you-can-bear.aspxhttp://www.itnews.com.au/News/337464,microsoft-to-aussies-well-charge-what-you-can-bear.aspxhttp://www.choice.com.au/media-and-news/consumer-news/news/choice-lodges-submission-on-it-price-discrimination.aspxhttp://www.choice.com.au/media-and-news/consumer-news/news/choice-lodges-submission-on-it-price-discrimination.aspxhttp://www.businessweek.com/news/2013-03-21/rihanna-costing-49-percent-more-as-australia-probes-apple-musichttp://www.businessweek.com/news/2013-03-21/rihanna-costing-49-percent-more-as-australia-probes-apple-music
Clash of the titans: Apple, Adobe, and Microsoft under fire at IT pricing inquiry
http://theconversation.com/clash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878[22/03/2013 4:34:29 PM]
CHOICE Australia: How Does Price Discrimination Work?
Microsoft has been unapologetic about its price discrimination
in relation to its services. The company maintains that “the
costs of providing the services – including establishing,
maintaining, supporting and advertising the services – needs
to be recovered and a profit from those operations derived, in
order to contribute to the overall return on the company’s
investment”.
Microsoft has long been an intellectual property maximalist,
both in terms of litigation and policy debates. Along with
Adobe, Microsoft is currently suing a Dubbo radio station
for copyright infringement, with the accusatory rhetoric of
“software piracy”.
Law reform
Given the great public interest in the inquiry into IT pricing, it
will be striking to see whether the Committee will respond to
proposed legislative action to address geo-pricing and geo-
blocking.
http://www.youngwitness.com.au/story/1366172/court-action-for-radio-stations/?cs=12https://theconversation.edu.au/when-the-price-is-not-right-technology-price-gouging-in-australia-10582
Clash of the titans: Apple, Adobe, and Microsoft under fire at IT pricing inquiry
http://theconversation.com/clash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878[22/03/2013 4:34:29 PM]
The inquiry has highlighted the need for copyright law reform
to protect the interests of consumers. In the wake of the
March 2013 case of Kirtsaeng vs John Wiley & Sons,
there is a need to reconsider Australia’s ancient parallel
importation restrictions.
Similarly, there is a need to revise the copyright laws
regarding digital locks – technological protection measures.
Digital locks have had many unintended consequences–
including jeopardizing consumer rights, chilling free
expression and scientific research, and impeding innovation
and competition. The author Cory Doctorow has been an
eloquent critic of digital locks:
Cory Doctorow on digital locks
In a piece for Wired, Kyle Wiens wrote that there was a need
for real copyright law reform to unlock content. “Copyright is
impacting more people than ever before because the line
between hardware and software, physical and digital has
blurred … once we buy an object — any object — we should
own it.
The Australian Competition and Consumer Commission
(ACCC) has been impressive during the debate over IT
pricing in Australia.
The chairman of the ACCC, Rod Sims, has observed that
his agency will take action if there is evidence of violations of
Australian consumer law or competition law. He has observed:
“If we can find one where we think the representation made
looks to be significantly divorced from reality and we think it’s
one of general use, then we’ll certainly take action".
http://www.scotusblog.com/case-files/cases/kirtsaeng-v-john-wiley-sons-inc/http://www.scotusblog.com/case-files/cases/kirtsaeng-v-john-wiley-sons-inc/http://www.scotusblog.com/case-files/cases/kirtsaeng-v-john-wiley-sons-inc/http://www.scotusblog.com/case-files/cases/kirtsaeng-v-john-wiley-sons-inc/http://www.scotusblog.com/case-files/cases/kirtsaeng-v-john-wiley-sons-inc/https://www.eff.org/pages/unintended-consequences-fifteen-years-under-dmcahttp://www.wired.com/opinion/2013/03/you-dont-own-your-cellphones-or-your-cars/http://www.afr.com/p/technology/accc_to_fight_tech_vendors_9wEo3HsjuRgdZfTHohQ4WOhttp://www.afr.com/p/technology/accc_to_fight_tech_vendors_9wEo3HsjuRgdZfTHohQ4WO
Clash of the titans: Apple, Adobe, and Microsoft under fire at IT pricing inquiry
http://theconversation.com/clash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878[22/03/2013 4:34:29 PM]
ARTICLES ALSO BY THIS AUTHOR
8 March 2013Aaron’s Army fights the Trans-Pacific Partnership
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14 February 2013The two treaties: Obama, trade, and the State of the Union
11 December 2012The Doha deadlock: intellectual property and climate change
30 November 2012Trade war in the Pacific: ASEAN and the Trans-Pacific Partnership
However, some of the government departments and agencies
seemed somewhat apathetic about the topic of IT pricing, and
lacking initiative in formulating policy responses – which is
disappointing, given the great public interest in the subject.
Ultimately, the inquiry into IT Pricing will be judged by the
efficacy of its outcomes – whether they have an instrumental
impact in lowering the prices of copyright works in Australia.
International trade
The inquiry into IT pricing, and the interrogation of Apple,
Adobe, and Microsoft, has generated much domestic and
international interest.
There has been much interest in New Zealand as to whether
there should be a similar inquiry into IT pricing.
Northwestern University law students from Chicago have
flown from the United States to follow the inquiry. International
press agencies – like Bloomberg and the BBC – have
sought to cover the public grilling of the IT titans.
The inquiry has also raised questions as to the impact of the
Trans-Pacific Partnership upon consumer rights. The United
States Trade Representative’s controversial proposed ban on
parallel importation in that agreement runs counter to both
recent United States precedent, and the Australian inquiry
into IT pricing.
http://theconversation.com/aarons-army-fights-the-trans-pacific-partnership-12273http://theconversation.com/aarons-army-fights-the-trans-pacific-partnership-12273http://theconversation.com/aarons-army-fights-the-trans-pacific-partnership-12273http://theconversation.com/aarons-army-fights-the-trans-pacific-partnership-12273http://theconversation.com/future-fund-drops-tobacco-should-fossil-fuels-be-next-12337http://theconversation.com/future-fund-drops-tobacco-should-fossil-fuels-be-next-12337http://theconversation.com/the-two-treaties-obama-trade-and-the-state-of-the-union-12197http://theconversation.com/the-two-treaties-obama-trade-and-the-state-of-the-union-12197http://theconversation.com/the-doha-deadlock-intellectual-property-and-climate-change-11244http://theconversation.com/the-doha-deadlock-intellectual-property-and-climate-change-11244http://theconversation.com/trade-war-in-the-pacific-asean-and-the-trans-pacific-partnership-10937http://theconversation.com/trade-war-in-the-pacific-asean-and-the-trans-pacific-partnership-10937http://theconversation.com/trade-war-in-the-pacific-asean-and-the-trans-pacific-partnership-10937http://theconversation.com/trade-war-in-the-pacific-asean-and-the-trans-pacific-partnership-10937http://www.stuff.co.nz/technology/gadgets/8432980/Aussie-MPs-to-grill-tech-barons-on-gouginghttp://www.stuff.co.nz/technology/gadgets/8432980/Aussie-MPs-to-grill-tech-barons-on-gouginghttp://www.bloomberg.com/news/2013-03-21/rihanna-costing-49-more-as-australia-probes-apple-music.htmlhttp://www.bbc.co.uk/news/business-21406745http://keionline.org/node/1686http://theconversation.com/sign_in?return_to=%2Fclash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878http://theconversation.com/sign_in?return_to=%2Fclash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878mailto:?body=Hi%0A%0AI%20found%20this%20article%20on%20http%3A%2F%2Ftheconversation.com%20that%20you%20might%20like%3A%20%22Clash%20of%20the%20titans%3A%20Apple%2C%20Adobe%2C%20and%20Microsoft%20under%20fire%20at%20IT%20pricing%20inquiry%22%20%0A%0Ahttp%3A%2F%2Ftheconversation.com%2Fclash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878&subject=Clash%20of%20the%20titans%3A%20Apple%2C%20Adobe%2C%20and%20Microsoft%20under%20fire%20at%20IT%20pricing%20inquirymailto:?body=Hi%0A%0AI%20found%20this%20article%20on%20http%3A%2F%2Ftheconversation.com%20that%20you%20might%20like%3A%20%22Clash%20of%20the%20titans%3A%20Apple%2C%20Adobe%2C%20and%20Microsoft%20under%20fire%20at%20IT%20pricing%20inquiry%22%20%0A%0Ahttp%3A%2F%2Ftheconversation.com%2Fclash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878&subject=Clash%20of%20the%20titans%3A%20Apple%2C%20Adobe%2C%20and%20Microsoft%20under%20fire%20at%20IT%20pricing%20inquiryhttp://twitter.com/intent/tweet?text=Clash+of+the+titans%3A+Apple%2C+Adobe%2C+and+Microsoft+under+fire+at+IT+pricing+inquiry&url=http%3A%2F%2Ftheconversation.com%2Fclash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878&utm_campaign=article-bottom&utm_medium=tweetbutton&utm_source=twitter&via=conversationeduhttp://twitter.com/intent/tweet?text=Clash+of+the+titans%3A+Apple%2C+Adobe%2C+and+Microsoft+under+fire+at+IT+pricing+inquiry&url=http%3A%2F%2Ftheconversation.com%2Fclash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878&utm_campaign=article-bottom&utm_medium=tweetbutton&utm_source=twitter&via=conversationedu
Clash of the titans: Apple, Adobe, and Microsoft under fire at IT pricing inquiry
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I would have loved to see the same companies grilled over transfer pricing. Imay be out on a limb here, but I can't help wondering if the complaint aboutlocalized cost of support and sales equates to where they declare the incomethey are earning.
As regards digitally downloaded IPR like s/w, its a complete phurphy. We didn'task to be taken to http://mumble/au to buy, we would have quite happily boughtdirect from http://mumble/us even in $USD, and paid the horrendous visa cardrate: we'd still be ahead.
The ironies of the AUD/USD rate being in our favour ...
George MichaelsonPerson
• report24 minutes ago
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Clash of the titans: Apple, Adobe, and Microsoft under fire at IT pricing inquiry
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