price gouging

Photo: http://www.globalpost.com

Apple may face an anti-trust investigation in Europe over its iPhone contracts with carriers as it defends itself against separate investigations for alleged price gouging in Australia.

Apple was informed last year that it would be required to attend a hearing by Australia’s Standing Committee on Infrastructure and Communications to explain why its pricing of digital content was higher in Australia than in the United States. The hearing is now underway, as reported by the Sydney Morning Herald, with Apple asked to explain why content sold through iTunes is marked up between 30 and 70 percent higher than in the U.S. Apple is blaming wholesale pricing agreements in the country.

“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,” said Mr King, who is Apple’s vice president for Australia, New Zealand and South Asia.

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Apple and other technology companies will soon have to answer the Australian Parliament as to why content from iTunes costs more for Australian consumers than United States consumers. The Sydney Morning Herald reported the Minister for Communications Stephen Conroy has now signed off on a parliamentary inquiry that will carry out sometime this year by the standing committee on infrastructure and communications from the House of Representatives.

The report noted the inquiry could extend to eBooks if evidence of price increases for Australian consumers comes to light. In July 2011, Apple cut the price of iOS apps in Australia by up to 25 percent in response to criticism from many, such as federal Labor MP Ed Husic, who raised the issue in Parliament. However, the inquiry will be the first time Apple is asked by Parliament to explain its pricing strategies for the Australian market. The issue surfaced once again last week with the release of Adobe’s latest software suite, which costs up to $1,400 more for Australians.

Husic also raised similar pricing complaints over Apple’s hardware products, which is something that the Brazilian market is experiencing today with the release of the new Apple TV:

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