Apple Accused of Price-Gouging Australian Consumers


Nearly one year ago, the Australian Competition & Consumer Commission accused Apple (NASDAQ: AAPL ) of misleading consumers when it released the third-generation iPad. The ACCC alleged that Apple's worldwide promotional materials -- which emphasized the cellular version as "Wi-Fi + 4G" -- were false, as most Australian consumers could not use the device at full 4G speeds. Now Apple is in trouble with Australian lawmakers, who want to know why the company charges more for its products in Australia than it does in the United States.

In America, a 15-inch MacBook Pro can be purchased for $2,199. In Australia, the same computer starts at A$2,499. The 32GB iPod Touch retails for $299 in America -- in Australia it sells for A$329. Meanwhile, the iPad Mini (which starts at $329 in America) sells for A$369 Down Under.

Virtually every item available on Apple's online store carries a higher price in Australia. Lawmakers want to know why, especially when the Australian currency is currently stronger than the U.S. dollar.

According to The Telegraph , Apple executives have been summoned to appear in front of a parliamentary committee in Canberra on March 22. Microsoft (NASDAQ: MSFT ) and Adobe (NASDAQ: ADBE ) have been ordered to appear as well. If executives from these companies refuse to appear, they could be fined or jailed.

Ed Husic, a Labor government MP who helped set up the committee, told The Telegraph that all three firms have "blamed each other for not appearing" when they were asked to do so last year.

"One will say 'we're not going to appear if the other is not going to appear,'" he said. "So we've cut straight to the chase and said we'll just summons you."

Australia is not the only country with higher prices. For example, it is not uncommon for software and video game consoles to retail for more in Japan than they do in the United States.

While the Australian market is relatively small compared to the billions of potential customers in China, India and other emerging territories, Apple is likely to maintain its current pricing structure for as long as possible in order to maximize profits.

Follow me @LouisBedigianBZ

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This article appears in: Investing , Investing Ideas

Referenced Stocks: AAPL , ADBE , MSFT


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