Post by Willow on Mar 22, 2013 10:00:05 GMT 9.5
BY:CHRIS GRIFFITH From: The Australian March 22, 2013 10:10AM
Tony King, the vice president for Apple Australia, New Zealand and South Asia appears before the IT Pricing Inquiry in Canberra today. Source: The Australian
APPLE has defended its Australian pricing of movies, TV shows and music sold through iTunes, saying price differences with the US are due to the GST and higher copyright fees asked by music labels and movie studios.
Apple today is the first of three major tech corporations to appear at a public hearing of parliament’s IT Pricing inquiry being held in Canberra.
The House of Representatives Standing Committee, Infrastructure and Communications has summonsed Apple, Adobe and Microsoft to defend their Australian pricing policies. Summonses were issued after the three had previously declined to give public evidence to the committee voluntarily.
Tony King, the vice president for Apple Australia, New Zealand and South Asia, said Apple’s goal was to offer equivalent pricing around the world, but in the case of iTunes, differences in tax systems – in Australia’s case the Goods and Services Tax, and copyright issues caused pricing differences.
But Apple’s local pricing was “not materially different” from those in the US iTunes store.
“In fact, today the price for the new iPad with Retina display and the iPad mini are within one to five per cent of the prices in the US,” he told the inquiry.
“The same is true of Apple’s own software titles offered on the Mac App Store, including Final Cut Pro, Logic, iPhoto, iMovie and GarageBand. These products are all priced in Australia within one to three percent of the prices in the United States.
“When comparing prices, it’s important to remember that US retail prices do not include sales tax. Here in Australia, of course, the price includes a 10 per cent GST. That fact alone is responsible for a great deal of confusion, and has resulted in some inaccurate conclusions about our pricing.”
He said Apple adjusted and reevaluated its prices at the time of a new product's introduction.
“When pricing Apple products for the Apple Online Store and at Apple Retail Stores in Australia, price considerations must go well beyond simply looking up a currency exchange rate,” he said.
“For example, Apple must consider differences between countries in product costs, freight charges, local sales taxes, levies, import duties, channel economics, competition and local laws regarding advertised prices.
“This detailed financial analysis results in product pricing that may be either slightly lower or slightly higher than US pricing for the same product,” he told the committee.
Mr King detailed the components that made up the retail cost of music on iTunes: the wholesale price of offering labels to retailers, publishing fees to industry associations, recovery costs of running the iTunes store and tax, in Australia’s case, the GST.
He said higher licensing fees sought by record labels, movie studios and TV networks were part of the reason for the differences.
Labor MPs Stephen Jones and Ed Husic asked Mr King why Apple couldn’t use its clout as a dominant purchaser or retailer of music to obtain more equitable licensing fees - as all content providers wanted their content available on iTunes.
Mr King said the pricing of content was not in Apple's control.
“We have seen the price of digital content in Australia slowly come down,” Mr King told the committee.
“The cards are in the hand of the folks who own the content, that is in not in our hand to play.”
He urged the committee to talk to the companies who owned the digital content.
Mr King said the cost of doing business in Australia, including the freighting of goods around the Australian continent, also was factored into local costings.
When asked to detail special Australian figures, he said Apple didn't break out its Australian costing. He also refused to detail the amount of tax the company paid in Australia, but said it did pay the 30 per cent corporate tax rate on its net profit and was open in its dealings with the Australian tax office.
Mr Husic said the Australian Securities and Investments Commission (ASIC) had reported that Apple last year paid $40 million in tax for generating $6 billion in revenue.
Mr King said he was not aware of any policy in Apple for allocating costs on a market basis.
Tony King, the vice president for Apple Australia, New Zealand and South Asia appears before the IT Pricing Inquiry in Canberra today. Source: The Australian
APPLE has defended its Australian pricing of movies, TV shows and music sold through iTunes, saying price differences with the US are due to the GST and higher copyright fees asked by music labels and movie studios.
Apple today is the first of three major tech corporations to appear at a public hearing of parliament’s IT Pricing inquiry being held in Canberra.
The House of Representatives Standing Committee, Infrastructure and Communications has summonsed Apple, Adobe and Microsoft to defend their Australian pricing policies. Summonses were issued after the three had previously declined to give public evidence to the committee voluntarily.
Tony King, the vice president for Apple Australia, New Zealand and South Asia, said Apple’s goal was to offer equivalent pricing around the world, but in the case of iTunes, differences in tax systems – in Australia’s case the Goods and Services Tax, and copyright issues caused pricing differences.
But Apple’s local pricing was “not materially different” from those in the US iTunes store.
“In fact, today the price for the new iPad with Retina display and the iPad mini are within one to five per cent of the prices in the US,” he told the inquiry.
“The same is true of Apple’s own software titles offered on the Mac App Store, including Final Cut Pro, Logic, iPhoto, iMovie and GarageBand. These products are all priced in Australia within one to three percent of the prices in the United States.
“When comparing prices, it’s important to remember that US retail prices do not include sales tax. Here in Australia, of course, the price includes a 10 per cent GST. That fact alone is responsible for a great deal of confusion, and has resulted in some inaccurate conclusions about our pricing.”
He said Apple adjusted and reevaluated its prices at the time of a new product's introduction.
“When pricing Apple products for the Apple Online Store and at Apple Retail Stores in Australia, price considerations must go well beyond simply looking up a currency exchange rate,” he said.
“For example, Apple must consider differences between countries in product costs, freight charges, local sales taxes, levies, import duties, channel economics, competition and local laws regarding advertised prices.
“This detailed financial analysis results in product pricing that may be either slightly lower or slightly higher than US pricing for the same product,” he told the committee.
Mr King detailed the components that made up the retail cost of music on iTunes: the wholesale price of offering labels to retailers, publishing fees to industry associations, recovery costs of running the iTunes store and tax, in Australia’s case, the GST.
He said higher licensing fees sought by record labels, movie studios and TV networks were part of the reason for the differences.
Labor MPs Stephen Jones and Ed Husic asked Mr King why Apple couldn’t use its clout as a dominant purchaser or retailer of music to obtain more equitable licensing fees - as all content providers wanted their content available on iTunes.
Mr King said the pricing of content was not in Apple's control.
“We have seen the price of digital content in Australia slowly come down,” Mr King told the committee.
“The cards are in the hand of the folks who own the content, that is in not in our hand to play.”
He urged the committee to talk to the companies who owned the digital content.
Mr King said the cost of doing business in Australia, including the freighting of goods around the Australian continent, also was factored into local costings.
When asked to detail special Australian figures, he said Apple didn't break out its Australian costing. He also refused to detail the amount of tax the company paid in Australia, but said it did pay the 30 per cent corporate tax rate on its net profit and was open in its dealings with the Australian tax office.
Mr Husic said the Australian Securities and Investments Commission (ASIC) had reported that Apple last year paid $40 million in tax for generating $6 billion in revenue.
Mr King said he was not aware of any policy in Apple for allocating costs on a market basis.