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Too Little Too Late

The Australian Government launched an inquiry into the gouging of Australian consumers towards the end of last year, but on the 11th of February 2013 they brought out the big guns and issued subpoenas for Adobe, Microsoft and Apple. On the 22nd of March, representatives of each company appeared before the inquiry to answer concerns about the so-called "Australia tax".

These three software giants have been hounded by the public for years but have long dodged our cries for an explanation as to why their products can cost us up to $2000 more than our US counterparts. It's a shame that it's taken the government getting involved for these firms to even acknowledge the price discrepancy, and it's also a shame that our government hasn't helped out the graphic design industry before this. If we were the car industry, for example, things wouldn't have gotten this bad - the government would have stepped in long ago and subsidised our industry to create an even playing playing field and ensure Australian jobs. Instead we've been left to struggle against American competitors who have a huge advantage when it comes to product affordability and, hence, their own profit margin.

This issue really hit the headlines in mainstream media when it was revealed that it's actually cheaper to fly to LA to buy a physical copy of Adobe CS6 than it is to walk into a store in Australia and buy the box set.

That revelation led to increased interest in the mark up of products that are intangible - ie. the majority of Apple, Microsoft and Adobe's products for graphic designers. These are not physical things that you can hold - they are software. They are things that do not need to be packaged and shipped and freighted, and yet the old adage of Australia being "on the other side of the world" is still being applied to their distribution. High speed internet has made the world a much smaller place when it comes to purchasing items produced over seas; These companies no longer need to spend extra money getting their products to our shores, so why are we still being charged with such huge mark-ups?

In response to the claims brought against them, each company used a different defence:

  • Microsoft remained mostly tight-lipped, quoting that Australian "customers will vote with their wallets." They claimed that prices were set by market standards and comparable to local competition, which is laughable considering that Microsoft is the industry standard and there isn't really any competition.
  • Apple pointed out that they do offer some similarly priced products on both the Australian and US markets, but then admitted that there are a lot of price discrepancies on iTunes. However, they said that this is largely out of their control, shifting most of the blame onto copyright holders such as APRA.
  • Adobe's defence was quite possibly the weakest of all - they highlighted running costs and salaries of workers on Australian soil and claimed that Australians were forced to buy from their local website and pay up to 167% more for a "personalised" service. Their own website states that this huge, global enterprise has only 80 Australian employees; obviously their salaries aren't going to eat up too much of the profit. As for the personalised service; We've been using Adobe suites since Version 2. This equates to more than 15 years and tens of thousands of dollars being spent on their product. Not once have we received local, personalised support or assistance - every time there's been an issue, we've been redirected to the US site.

On top of this, Adobe still haven't fixed the issue of InDesign not running correctly on multiple screens, despite numerous complaints being lodged by customers.

Since the inquiry has been launched, Adobe have dropped the prices of the Creative Cloud suite to a rate much more comparable to the US: The annual subscription now costs Australians $50 per month, only $1 more than what it costs American customers, down from $63. The price of shorter term subscriptions have also been dropped, from $95 down to $75. This is great news for artists who are happy to pay the monthly subscription rate, but for those who'd prefer a one time lump sum payment, you'll still be grossly overcharged.

We'll be following the case closely and updating you with any news of further price cuts made by any of the corporations, but we at Rhye Media and the graphic design community at large are extremely disheartened by the knowledge that it's taken a federal inquiry to get Apple, Microsoft and Adobe to listen to their customers.

If you'd like more information about the case, check out the articles listed below;