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Government inquiry says Aussies ripped-off, wants geo-blocking abolished

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The Australian government inquiry into of the cost of IT hardware and software products, such as computer games and consoles, sold in Australia has recommended doing away with restrictions on parallel imports and banning geo-blocking, according to a report released by the Standing Committee on Infrastructure and Communications.

The committee compared the prices of more than 70 video game products, finding that the average and median price difference compared to other markets was 84 percent and 61 percent, respectively. Consumer body Choice submitted a report to the inquiry that compared the prices of more than 200 products, including video games. It found that Australian customers, on average, pay more than 50 percent when compared to US consumers.

The report also states that geoblocking may restrict Australian consumers’ ability to compare prices and make informed purchases.

"The practical effect of geo-blocking from the Australian consumer's perspective is to restrict access to a cheaper global marketplace," the report stated, referring to services such as Steam, Origin, Xbox Live, and PlayStation Network. "According to views expressed in submissions, many Australian consumers see themselves as limited to a national market characterised by markedly higher prices for IT products and services."

Due to a submission by Nic Watt, Creative Director of Nnooo, the report also acknowledged how inflated prices for products - such as Autodesk's Maya 2013 3D and Adobe software packages — affect Australian game developers. According to the report, Australian developers pay "nearly 45 per cent more for Autodesk software" compared to their counterparts in other markets.

"As a games developer for PlayStation (Sony), Wii U (Nintendo) and Nintendo 3DS we have to use one of these packages to be able to create and export our 3D artwork into our games," Watt's submission stated. "Like Autodesk there are no serious competitors and so for making textures (images to put onto a 3D model) for use in games we are required to use their products

"[Autodesk] have in the last 7 years purchased the three main 3D visualisation packages used for making films, TV and video games ... the net result of this is that we have to buy the software from [Autodesk] Australia and they control the pricing," he continued. "We cannot buy a competing product as in our industry they own the major ones."

The report titled "At what cost? IT pricing and the Australia tax," looked into the pricing of products sold to Australians over the internet and in retail outlets compared to other markets such as the U.S., U.K. and "economies in the Asia-Pacific."

The inquiry was set up to establish what the price discrepancies were, why they exist, what impacts the differences have on Australian businesses, governments and households; and make recommendations to "address any differences that operate to the disadvantage of Australian consumers."

The committee accepted submissions from the public, IT companies, business and industry bodies. According to the report, the inquiry received 133 submissions, 15 supplementary submissions and 5 exhibits, with "more than half of the submissions" from consumers, most of who were frustrated by "unfair prices for IT products," including video games.