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Adobe drops prices after scrutiny from Australian MPs

money flying out of a laptop

By Reuters and Nicole Kobie

Posted on 12 Feb 2013 at 11:11

Adobe has slashed prices of its Creative Cloud after Australian MPs started an inquiry into why tech products costs more locally than they do in the US.

The price cuts mean Creative Cloud software and membership in Australia will be priced on a par with the US, according to newspaper reports.

"Creative Cloud membership pricing in Australia for individuals has been reduced to A$49.99 on an annual subscription per month for new and current customers, effective immediately," the company said in a statement seen by the Australian Financial Review. The price had previously been A$63. "Month to month pricing was $94.99 per month [and is now] $74.99 per month."

"As Adobe continues to attract membership to its cloud offerings, it is evolving its product offering to provide increased value to subscribers, including new pricing for customers in Australia and New Zealand,” the company added.

In what's probably the first time anywhere in the world, these IT firms are now being summoned by the Australian parliament to explain why they price their products so much higher in Australia compared to the United States

Australian attention

The move comes after Adobe, Apple, and Microsoft were ordered to appear before Australia's parliament to explain why local consumers pay more for their products than US customers, despite the strong Aussie dollar.

Broadening a row between Apple and Australian lawmakers over corporate taxes paid on its operations, Apple executives were formally summonsed today to front a parliamentary committee in Canberra on 22 March.

"In what's probably the first time anywhere in the world, these IT firms are now being summoned by the Australian parliament to explain why they price their products so much higher in Australia compared to the United States," said ruling Labour government MP Ed Husic, who helped set up the committee.

High local prices and soaring cost-of-living bills for basic services are hurting the popularity of the minority Labour government ahead of a 14 September election it is widely tipped to lose, giving political momentum to the inquiry.

All three companies have so far declined to appear before the special committee set up in May last year to investigate possible price gouging on Australian hardware and software buyers, despite the Australian dollar hovering near record highs above the US currency around A$1.03.

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User comments

the same should happen in this country but it won't because the UK government are spineless leaches who like a nice big cut of the sales in taxes.

By mr_chips on 11 Feb 2013

Online services

This will become more and more of an issue particularly with regard online services.

iTunes match ($21.99 in US, $35 equivalent in UK)

Office 365 Home Premium ($99.99 in US, $126 in UK)

Difficult to see how the big companies can justify the difference in online services where shipping, labour & retail costs are irrlevant.

It needs someone to grasp the thistle and raise the profile of this problem

By bronven on 11 Feb 2013

We need a law passed banning "regions"

Thereby making the world a single market.

If I buy a song on iTunes, a eBook on Amazon, or a game on Steam it should be price exactly the same in the USA, UK or Australia. Let my credit card company worry about the currency.

If a BluRay is in English it should be the same price, in any country, not "specially priced" for the UK or Australia!

Profiteering leaves a bad taste at the best of times, but in a recession it plain stinks. What adds insult to injury, is the same companies making us pick up soap in the prison shower, are also the headline acts in "tax dodgers the movie"...

By cheysuli on 11 Feb 2013

Level Playing Field?

Whilst there would still be a price difference, have they taken into account differences in sales taxes etc, when comparing the prices?

Also, Australia has it's own language dictionary, time zone settings, currency etc. So functionality has to be built into programs to accommodate that. But there's not that many Australians to split the costs between.

By Penfolduk01 on 11 Feb 2013

@Penfolduk01

They are looking at prices before tax.

Also, dictionary, time zone and currency are pre-existing software, most of which hasn't changed in decades. How many times can you charge again for the same thing?

Typically I can buy a 32GB iPod in Florida (with taxes) for upwards of £50 less than here in the UK. Yet strangely the region settings on it for the UK work just fine....

The Australians have a valid point. They're being ripped off.

By cheysuli on 12 Feb 2013

Adobe one of the worst

CS6 for PC:

US: $572.95
UK: $823.16

That's a huge difference! (Both are excluding VAT). In £s the US price with UK VAT translates to £366 instead of the actual £631 Adobe charges.

Prices from Amazon.

By SwissMac on 12 Feb 2013

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