IT companies tell Aussies to do as they are told

It seems that Australian government efforts to get technology companies to stop ripping off its citizens have gone no-where.

The Australians have been holding an inquiry into how technology companies were charging Aussies a huge surcharge for products. It seems that the IT industry gambled that the government has no heart to bring in regulations to curb its price gouging actions and it has paid off.

According to the Sydney Morning Herald,  submission to the parliamentary IT pricing inquiry by the federal Treasury warned any direct regulation of prices by government could do more harm than good.

The Treasury believes that competition laws are capable of addressing anti-competitive conduct without the need for a specific price discrimination prohibition.

Apparently not. Last week Lenovo launched a ThinkPad X1 Carbon Ultrabook. It will go on sale for $1999 in Australia compared to $1299 in the United States.

Lenovo claimed it priced its products to ensure they were “competitive with local market offerings”. In other words while all the others are ripping off consumers, they have to do the same thing.

But the Treasury submission claimed that improving local competition and increasing access to international markets were better than bringing in new consumer laws.

More interventionist measures could “stifle innovation and reduce competition further” as it was better that firms should generally be free to set the prices they want, the Treasury said.

But the language of the Treasury sounds like it was written by the technology industry itself. It is not clear how allowing companies to price gouge Australians helps innovation unless you claim that the extra money can be spent on R&D. It does seem unfair that Australians should pay so that prices can be kept low in the US.

Apple and Microsoft refused to appear at the public hearings for the inquiry late last month, which shows how seriously they are taking Australian concerns. But the treasury report shows that  the Australian government is unlikely to do anything to stop their antics down under.