A non-profit consumer advocacy group has taken notice of prices that consumers pay for certain tech products and services, and has decided to call out Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) over their pricing structures in Australia, and apparently representatives from both companies may be summoned to personally appear in Australia to answer for their pricing models.
A courtroom in Canberra is looking into a case where Choice, the consumer-advocacy group, has noted that while the Australian dollar has strengthened against the U.S. dollar in recent years (to actually be worth more than a U.S dollar), Australians can wind up paying nearly 50 percent more than Americans for many of the same Apple Inc. (NASDAQ:AAPL) iTunes downloads or Microsoft Corporation (NASDAQ:MSFT) software sold in the U.S. The Australian dollar is currently worth US$1.05 – an increase of about 47 percent since 2008, and Choice believes that companies like Apple and Microsoft are now gouging Australian customers.
As a couple of examples were featured in a recent report. U.S. recording artist Rihanna has a new album called “Unapologetic,” which retails on the Apple Inc. (NASDAQ:AAPL) iTunes store for $16 in the U.S. and $23 in Australia. As another example, Microsoft Corporation (NASDAQ:MSFT) sells it Office 265 software package for $400 in the States but $600 in Australia. Choice is basically questioning these prices because, according to the exchange rate, the former example should retail Down Under for about $17 instead of $23 in Australia, and the Office 365 example should retail for $420 in Australia, not $600.
“If a legitimate product is available in an overseas market, people should be able to access it,” said Matthew Levey, Choice campaign head. “(This is) a form of protectionism imposed by private businesses.” Both Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) – maybe other companies as well – will likely be asked to account for the large difference in pricing for Australian consumers. Neither company has made any comment officially about this, but Microsoft sent a statements saying that sales taxes, labor and rental costs, marketing spending, and third-party resellers are all factors that may increase prices in Australia.
It is possible that if these companies are found to have been gouging Aussie customers, they may be forced to pay back potentially millions of dolars to consumers for cover the difference in their prices.
What do you think about this? Could this be a case of price-gouging by Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT), or is there really something more to this? Is there a middle ground here? Let us know your thoughts in the comments section below.
DISCLOSURE: I own no positions in any stock mentioned.
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