Why Australian shoppers pay more

Decisions by global technology companies are probably the main reason why Australians pay much more than shoppers overseas for downloads of music, films and software, a government department says.

But the Department of Broadband, Communications and the Digital Economy has also played down the case for tougher laws that would force foreign companies to charge Australians less.

With some products on iTunes costing twice as much here as overseas and software also costing significantly more, a parliamentary inquiry is calling on firms such as Apple and Microsoft to explain the gap.

In its submission, the department says pricing decisions of international distributors were often the main reason Australians paid more.

‘‘In some cases it appears likely that decisions by international distributors are the primary causes of price differences between Australia and other markets,’’ the submission said.

Companies often tried to protect their profits in Australia by using software that prevented the use of Australian credit cards on overseas websites, it said.

However, it said technology companies’ decisions to prevent Australians getting a better deal overseas were likely to fail, as consumers would seek out ways to bypass the restrictions.

‘‘It is apparent that many consumers consider these price differences to be unfair or unjust, and will go to some lengths to avoid paying extra compared to consumers in other markets,’’ the department said.

Despite this consumer anger, it argued  against government intervention in the market. Instead, it claimed commercial forces would pressure companies to bring their Australian prices into line with other countries.

For physical goods, some Australian shoppers already ‘‘rent’’ mailing addresses in the US, and arrange to have the products then sent to Australia. Some consumers may also turn to piracy as a way to get digital content at foreign prices, it said.

Trying to impose restrictions on foreign retailers were unlikely to be worth the likely cost, it said.

Despite the high Australian dollar, downloading the film Toy Story from iTunes cost $24.99 for Australians, more than double the $10.10 charged internationally, a snapshot survey by the Department showed.

Microsoft Windows 7 Premium cost up to $279 in Australia, compared with $200 in the United States and up to $171.55 in the United Kingdom.

Submissions from the technology industry have defended the higher prices paid in Australia by saying the costs of running a business were higher here than overseas.

Microsoft’s submission blamed a range of factors for its high Australian prices, including the relatively high cost of labour, rent, and transport costs.

‘‘Like any other company in any other industry, Microsoft seeks a rate of return on its investment in the Australian ICT [information and communications and technology] market to enable it to market and support its products with a presence in Australia,’’ it said.

The inquiry has not yet published a submission from Apple, which has been contacted for comment.

The story Why Australian shoppers pay more first appeared on The Sydney Morning Herald.

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