End of the price gouging

by Richard Denniss in The Australian Financial Review
Originally published in The Australian Financial Review on May 3, 2012

The standard excuse for why Australians pay far higher prices than Americans for clothes, consumer goods and cars is to highlight the high transport costs associated with the tyranny of distance. So what is their excuse for more expensive music and software downloads? Dearer data costs due to longer cables? You might assume that because Australia has a free-trade agreement with the United States that Australian consumers and American retailers could trade freely, but you would be wrong. Just try paying the US price for a song on iTunes or a ring at Tiffany’s. Many American retailers make Australians pay a premium price. They have engineered their US websites to prevent customers with Australian credit card numbers or Australian delivery addresses from purchasing from their sites. Such shoppers are redirected to the Australian website where they may pay up to 50 per cent more. Last week the Minister for Communications, Stephen Conroy, announced that an inquiry would be held into the significant price differences for software and music downloads between Australia and the US. An inquiry into software price differences isn’t a bad place to start, but any political party that is serious about free markets and the cost of living should go further than iTunes.

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