Apple Inc has been ordered to appear before Australia's parliament with
fellow technology giants Microsoft Inc and Adobe Systems Inc to explain
why local consumers pay so much for their products, despite the strong
Broadening a row between the world's most valuable
company and Australian lawmakers over corporate taxes paid on Apple's
operations, Apple executives were formally summonsed on Monday to front a
parliamentary committee in Canberra on March 22.
probably the first time anywhere in the world, these IT firms are now
being summonsed by the Australian parliament to explain why they price
their products so much higher in Australia compared to the United
States," said ruling Labor government MP Ed Husic, who helped set up the
High local prices and soaring cost-of-living bills for
basic services are hurting the popularity of the minority Labor
government ahead of a September 14 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 U.S. currency around A$1.03.
WiFi iPad produced by Apple with Retina display sells in Australia for
A$539, $40 above the price in the U.S., despite the stronger local
currency. Microsoft's latest versions of office 365 home premium cost
A$119 in Australia versus $99.99 in the United States.
and other multinationals have blamed high operating costs in Australia
including high local wages and conditions, as well as import costs and
the relatively small size of the retail market in the $1.5 trillion
Failure to appear before the committee as ordered could
leave all three firms open to contempt of parliament charges, fines or
even jail terms.
"For some time consumers and businesses have been
trying to work out why they are paying so much more, particularly for
software, where if it's downloaded there is no shipping or handling, or
much of a labour cost," Husic told Reuters.
Adobe and Microsoft
have previously provided separate written statements and submissions to
the inquiry. But executives have been reluctant to explain their pricing
before a public inquiry.
Apple executives in Australia declined to comment when contacted by Reuters.
companies have blamed each other for not appearing. One will say 'we're
not going to appear if the other is not going to appear'. So we've cut
straight to the chase and said we'll just summons you," Husic said.
gouging in IT for hardware and software, Husic said, could be costing
Australia's more than 2 million small and medium businesses as much as
$10 billion extra.
Husic took aim at Apple last week over local
taxes paid by the company, telling parliament that Apple generated A$6
billion in revenue in Australia in 2011, but paid only A$40 million in
tax - less than one percent of turnover.
"While they generated A$6
billion in revenue, they apparently racked up from what I understand
A$5.5 billion in costs. How?" Husic said. "They do not manufacture here.
They have no factories here."
He accused Apple executives of
maintaining a "cloak of invisibility", while dodging scrutiny of
operations. Apple has been criticised elsewhere for its zealous secrecy.
anyone who has sought answers from them about their Australian
operations and you will hear a common theme. They will not talk," he
© Thomson Reuters 2013