Providers quizzed on high prices

TOM PULLAR-STRECKER
Last updated 05:00 02/03/2014

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Ministers called in executives from Microsoft, Apple, IBM and software firm Adobe late last year to express concern over high New Zealand pricing for software and other digital products, Communications Minister Amy Adams has revealed.

The conversations took place after a "pricing gouging" inquiry held by an Australian parliamentary committee found technology multinationals were often charging Australians 50 per cent more than Americans and Europeans.

Adams said many multinationals set prices on an "Australasian market basis" and the same disparities existed here. She and Commerce Minister Craig Foss met the four companies to voice their concerns, she said.

The Australian House of Representatives committee recommended making it legal for Australians to circumvent "geo-blocking" restrictions on websites so Australians could buy at local prices from overseas sites. But Adams said she was "not sure if the Australian work went much further" following Australia's change of government in September and, in any case, restrictions forbidding geoblocking-circumvention did not exist in New Zealand.

If the Australian Government did decide to take other action, the Government "would really like to look at it on a trans-Tasman basis", Adams said. But she indicated it was not clear what those steps could be. "We don't get to legislate what overseas companies charge for their products."

She and Foss had told the companies that geographical market segmentation should not be used as a pricing tool and the Government would be watching closely, she said. "They certainly left being very aware of our concern and our intention to monitor it and they indicated to us they would be mindful of that."

Multinationals' pricing policies varied, she said. "The Apple difference is much smaller than some of the Adobe ones."

An Adobe spokeswoman said its pricing model had changed since the Australian inquiry was initiated and the prices of all its flagship products were now the same around the world. Adams was not present at the meeting when that was relayed to Foss, she said.

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