Apple Responds To Price Gouging Claims In Australia

Apple Price Gouging

Apple has replied to price gouging in Australia by blaming publishers for the high cost of music, movies, TV shows, and other forms of entertainment. Apple, Microsoft, and Adobe are all facing claims of price gouging in the country.

According to Apple, the prices it set for multimedia products was no different than other online and in-store retailers at the time of the claims.

Tony King, Apple’s vice president for Australia, New Zealand and South Asia says of the price gouging claims:

“The pricing of this digital content is based on the wholesale prices which are set through negotiated contracts with the record labels, movie studios and TV networks. In Australia, they have often set a higher wholesale price than the price of similar content in the United States.”

The claims were raised by Australian consumer group Choice. The group found that the disparity between the US dollar and the Australian dollar meant that Australian customers often paid 50 percent more for some products compared to US customers.

The study also claims that iTunes customers often paid up to 70 percent more for many albums on the iTunes store.

Apple has been quick to note that the Australian government added a 10 percent goods and services tax that adds to the overall cost of goods sold. When added fees are taken into account, Australian customers still pay 3 to 10 percent more for Apple products than their US counterparts. The Apple iPhone can fetch a 20 percent premium over US prices.

While the US dollar and Australian dollar are at near parity, King notes that constantly adjusting prices to match the US vs. AUS currency rates would likely cause confusion and anger among buyers.

King also notice that there are significant “differences between countries in product costs, freight charges, local sales taxes, levies, import duties, channel economics, competition and local laws regarding advertised prices.”