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.
Choice Australia CEO Alan Kirkland said: “If Adobe was genuine about treating consumers fairly, it would have reduced prices across all of its products.”
Adobe has been reliant upon technological protection measures, digital locks, and geo-blocking. 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 geo-blocking 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 Microsoft in 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 $599 to download in Australia, but merely $399.99 at the United States web store.
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.
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 jeopardising 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.
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”.
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 Partnershipupon 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.
Matthew Rimmer is an ARC Future Fellow and associate professor in intellectual property at Australian National University.
This article was first published at The Conversation.
