Revealed: How IT price discrimination costs Australian SMEs

Australian start-ups are suffering from unfair pricing in the Australian technology market, with research conducted by StartupSmart revealing that basic start-up tech products can cost up to 37.5% more than their US counterparts.

StartupSmart has compiled a short list of IT products start-ups may commonly purchase. The list highlights the price differences between Australia and the US:

• PowerPoint: In Australia, you’ll fork out $189 for PowerPoint. In the US, the price comes down by almost $50 to $139.99, making it about 26% cheaper.

• Windows 7 Professional (Full version): You’re looking at $449 to purchase Windows 7 Professional in Australia, compared to just $299.99 in the US. That’s a price difference of 33%.

• XPS 8500 Desktop: To get your hands on this particular desktop, you’ll need to spend $1,199 in Australia. In the US, the price comes down to $749.99, which is 37.5% cheaper.

• MacBook Air (11 inch 128 GB): In Australia, this version of the MacBook Air will set you back $1,249. But in the US it’s priced at $1,099, making it 12% cheaper.

• iPad (Wi-Fi + Cellular) 16GB: You’re looking at $679 for this device in Australia. In the US, it’s $50 cheaper at $629, which is a price difference of about 7%.

The price comparison comes as a Parliamentary inquiry kicks off into the amount the IT industry charges Australian consumers and businesses compared to the rest of the world. The inquiry is being conducted by the House Committee on Infrastructure and Communications, which held its first public hearing in Sydney today.

“The inquiry into IT price discrimination has generated a great deal of interest, judging by submissions,” committee chair Nick Champion MP said in a statement.

“The committee hopes to hear from consumer and industry groups in Sydney… [in order to] understand the extent of concerns of Australians about IT price discrimination.”

There are countless examples of electronic goods, software and entertainment products that cost more in Australia than overseas.

The industry blames the cost of doing business in Australia, but consumer advocates – including Choice – reject that.

“Choice has identified examples of large price differences in IT hardware and software products between the Australian and US markets,” Choice said in its submission.

“Our analysis suggests the most likely cause of these differences is international price discrimination, which disadvantages Australian consumers and business.”

Choice has examined the prices of music downloads, PC games, software, Wii console games and computer hardware in Australia and the US, all of which is detailed in its submission.

“This research has identified price differences of approximately 50%. All products were affected by price differences to various degrees,” it said.

Choice said while it acknowledges Australia is subject to higher costs, these cannot account for the 50% price differences identified in IT hardware and software products.

“Choice believes that international price discrimination is the most likely cause of Australia’s high IT prices,” it said.

“International price discrimination impacts the costs and productivity of Australian businesses operating in the digital economy.”

This article first appeared on StartupSmart.