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Are IT Companies Ripping Off Aussies?

April 23, 2012 by rochelle in Tech with 0 Comments

It appears that IT companies selling software online are charging Aussies more than other countries. This is what Labor MP Ed Husic revealed, saying that software costs more in Australia.

Husic cited the example of Microsoft Windows 7 Professional. He said that the software can be purchased from a US online store for $199.99. If one, however, buys it from an Australian website, the same product would cost $449 or a mark-up of 125 percent.

Another example Husic cited was Adobe CS5 Photoshop. It is sold on a US website for $2,599 but it costs close to $4,000 in an Australian website.

Because of the huge discrepancy, Husic is encouraging the government to investigate the situation.

IT vendors blamed the law of supply and demand, saying the Australian market is much smaller compared to the US. A Productivity Commission report, however, said the delivery cost is practically zero and the same all over the world.

A spokesperson from Microsoft was also quick to shift blame, saying the mark-up is because of several factors including local market conditions, taxes and duties, among others.

Sam Hendry, the head of AVG Australia, also said the mark-up is because of margin and cost structures. AVG Australia markets anti-virus software programs.

Adobe and AutoCAD, two of the biggest software providers, refused to make a comment on the issue.

The Australian Competition and Consumer Commission said it doesn’t have authority over software prices sold in Australia. Spokeswoman Erin Polmear said there are no current provisions that govern and prohibit this kind of conduct.

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