Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Infrastructure and Communications I wish to make a statement concerning the committee's inquiry into IT pricing in Australia in order to update the House on the progress of the inquiry. Clearly the complicated issue of IT pricing in Australia balances consumers, industry, copyright holders and the good of the general economy. So far we have had 93 submissions and four supplementary submissions. In particular, there has been strong interest from consumer groups—both individuals and business—and this interest is behind the large number of submissions. Choice and Australian Communications Consumer Action Network have made strong submissions on behalf of consumers.

I had expected there to be strong interest from industry as well, and we do need evidence on the public record because it is vital for the committee to be able to form accurate conclusions, but to date the committee has received only qualified and sporadic cooperation from industry groups and major IT companies. ARIA initially declined to appear before the committee but, after requests, finally did appear on 5 October. The AIIA, which is the industry association representing IT companies, provided a submission and appeared but was unable to provide specific information on behalf of its individual members. Once it became apparent to the committee that major companies did not intend to appear before the committee and give public evidence, we did ask the AIIA to reappear on behalf of the industry; but this request was refused.

Apple made a confidential submission and provided a confidential briefing to members of the committee but have refused repeated written requests to make a public submission or to appear before the committee to give evidence. Adobe initially informed us that they would be represented through the AIIA, but, given that the AIIA's inability to provide detailed answers to the committee's satisfaction, we then sought further information and submissions from Adobe, which they provided on a confidential basis. They have offered to appear—but only if other companies in the sector appeared at the same time. Microsoft, to their credit, made a submission and some further supplementary submissions to the inquiry but have been unwilling to appear before the committee and have proposed alternative contributions instead.

So, to one degree or another, there has been a real unwillingness to submit evidence in public or to appear before the committee on the part of both industry associations and major companies in the area of IT. The committee detects a deep reluctance and resistance on the part of the relevant companies to discuss in public the issues that the committee is considering or to publicly defend their business models and pricing structures. The committee would, of course, be willing to hear in camera matters that were commercially sensitive—which is a common practice amongst committees—but the committee's offer to do so has not been taken up. Rather, the industry seems to employ the tactic of giving either little or limited cooperation to the committee, particularly in public testimony. This stands in stark contrast to what has happened in other inquiries which have investigated areas of commercial sensitivity in that these inquiries received cooperation and information from industry participants. An example would be the joint select committee into the retail sector in 1999, where Woolworths appeared twice and included their CEO Roger Corbett and five other senior managers of the business. If it is good enough for an Australian company such as Woolworths to give public evidence on matters of commercial interest to them, it should be good enough for Apple and others to appear and do the same.

It is not good enough for the industry to simply stonewall the inquiry—or, for that matter, to ignore interested consumers who have a legitimate public interest in IT pricing. It would be far better for companies to defend their business model and their pricing structure in public before the committee. The committee has offered these companies more than once the chance to appear. We would give them a fair hearing; they have my public commitment on it. The companies' failure to appear leaves the committee with an unenviable choice between compelling the attendance of individuals to give evidence and reporting without hearing in detail from industry. The choice between one or other of these alternatives can only be averted by the IT industry's following the first rule of good public relations: always turn up and put your case.

Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

( I rise to support the chair of the committee as his deputy. I take us back to the referral from Senator Conroy on 18 May where he said, in the terms of reference for this committee on IT hardware and software pricing, that he wanted us to investigate:

… differences in prices of products sold in Australia compared with other markets (US, UK and Asia-Pacific) …

He also pointed out to us that some products have been costing up to 90 per cent more in Australia than have similar products sold in the US. We were then told by Choice that they could identify a range of products for which prices were approximately 50 per cent higher in Australia than they were elsewhere. The Productivity Commission also identified that very high prices are being paid in Australia in comparison with the prices being paid in other regions.

It is obvious from the evidence we received from members of the public and people on the consumer side of this agenda that the public has had enough of this pricing, which puts Australia at a disadvantage in a whole range of areas, such as IT hardware and software and things that spin off them—music downloads and engineering, medical and educational software.

We have been told traditionally that things have to be a bit dearer in Australia because of our geographic isolation, the historically weak Australian dollar and our comparatively small population. Australia is not that geographically remote in this era of the internet and fast international aviation and communications. We certainly do not have the historically low dollar at present and our comparatively small population is one of the most IT-literate in the world.

To maintain this unfair advantage, we are told, a number of companies have played the game of selective encryption, geoblocking and geofencing to ensure that people cannot buy certain goods online and use them in Australia. That is simply unacceptable. We have been told by both sides of politics over the years that we have to accept the international price of petrol and the international price of gas and so on, and, as an obedient population, we say, 'Fair enough—that's the way business is done in the world.' But when it comes to this IT market equally we should not be put at a disadvantage. It falls to our government and the opposition to stand up against this and take a very firm stand on it.

The committee sought constructive, candid involvement from various large companies. But they have been difficult, as the chairman just pointed out. There seemed to be a reluctance from some international corporations to get involved in the inquiry, even after a number of direct requests. We feel that we have come to a point where there is obstruction, avoidance and evasion. One of the silliest ones is that, on the one hand, the industry body says they are there to represent the industry, but, when we ask them a specific question, they say they cannot possibly talk for individual members. So we have this catch 22 going on.

The ultimate sanction for this sort of thing is to invoke the committee's powers to subpoena people. I am always reluctant to do that, but I think a time comes when we should consider the sanctity of the parliament and what it is here to do. When the minister asks us to look into something and report back to this parliament and we are deliberately frustrated, I think we need to send out a signal that we are not going to accept that and that we expect a better level of conduct from the industry.