Feeds

back to article Microsoft, Adobe, wilt during Australian price gouge grilling

Adobe and Microsoft's Australia's managing directors have both struggled to answer hours of tough questions from Australia's Parliamentary inquiry into IT pricing. Apple's Tony King was the first witness to front members of parliament for ninety minutes today of MPs today, and acquitted himself well. Adobe's Paul Robson was …

COMMENTS

This topic is closed for new posts.

Page:

Silver badge
Pirate

Gouging

Plain and simple.

Because they can.

19
1
Holmes

Re: Gouging

Well yes, companies can charge what their customers are willing to pay, but I wouldn't call it gouging. I call it market forces. If they charge too much then they won't sell as many products so their profit might not be the maximum they could make. But they balance that against selling more at a cheaper price, but again their profit might not be the maximum they could make. See Laffer Curve. Whilst I don't like Microsoft or Adobe's prices they don't have a monopoly. There is LibreOffice and Gimp to name two alternatives. But there are non-free alternatives too. In all cases you get what you pay for. For the vast majority of customers of the products, write and mspaint would be adequate for their needs if they really look at them.

4
7
Silver badge

Re: Gouging

Yes its market forces \ charging what the market will bear etc but it actually works against the USA at times. Look at drug prices in the USA and how it affects the price of healthcare. Europe & Canada pay a fraction of the cost for the drugs because if they don't agree to the pricing they don't get to many customers (NICE in the UK basically negotiates pricing) in that country. So the USA basically makes up most of the profit so it isn't entirely one sided.

The argument for cheap educational software is simple, I got loads of free software legally in university as the university was given it to ensure they taught it. Want a load of oracle engineers, bung the uni a load of software. Same for photoshop, office, spss etc, these people will go out into the workforce being familiar with those programs which aids their purchase by companies. Not sure it's entirely right but I appreciated it at the time!

2
1
Thumb Up

Re: Market Forces

I totally agree. What is happening is a textbook case in economics. Microsoft, being a monopoly, is exerting its power in making prices, not taking prices. The market is a monopoly, dominated by one supplier (MSFT). It is NOT what economists call a Imperfect Market - which is what most people are refering to when they talk about a "competitive market".

Let's be clear: it is NOT a "competitive market", it is a monopoly. What we are seeing IS market forces at work: those of a monopoly.

The simplified notion that If they set their prices too high then they won't sell as many products (ergo their profits are smaller) is a perfectly legitimate claim in an Imperfect Market, but it has no place in a monopoly. The pricing disparities raised by the inquiry are proof positive that this is going on. MSFT, as a monopolist, is maximising its profits by setting prices where they want. In simple terms they are "coining it."

14
2
Silver badge
Meh

Re: Gouging

They used to do it to the UK, everything from cars to electrical goods.

While not as bad as previous years, the EU rules have evened things out a bit, it still happens here but not on such a scale.

I don't often praise the Aussies, they are a particularly obnoxious bunch of convicts, but in this case I will fly the flag and cheer them on and hope that they make the lives of these money grabbing American thieves a misery.

Well done to the land of Kangaroos.

8
4
Silver badge

Re: Gouging

It did make rather amusing reading. You have fairly senior folks saying they have absolutely no idea how a product is priced etc. They should have fuond them in contempt and locked them up until someone could give a proper answer. It's clear the companies found someone high enough up the food chain to sound impressive but low enough not to know all the answers. It's a shame these inquiries don't have more power to demand actual answers. The UK gets much of the same, anything but a straightforward answer.

6
1

Re: Gouging

"There is LibreOffice and Gimp to name two alternatives"

Think a little bit more - if you submit your CV for a role - and they explicitly state they want doc format - will you risk using LO or OOo to create that document and have it appear a jumbled mess when it gets read. Same goes for multi million dollar tenders. MS Office is an essential in doing business, Libre Office might satisfy some use cases in education and where staff need basic word processing and spreadsheet functionality, however it explicitly is not a replacement for Office when it comes to B2B.

And Gimp a replacement for Photoshop - oh how dearly I wish this were true. Its Windows version is a side hack not even created by the project, it's Mac version slightly better. On Linux it is fine, but then how many businesses use Linux, and especially for "creative staff"? Once again if you start trying to exchange XCF with print houses and agencies - they will either laugh at you or ask, wtf?

Until the accepted "industry standard" formats are true open standards we will not see this change unless something groundbreaking happens, i.e. the US govt forces them to reveal full specs under an open license.

3
1
Silver badge
Linux

Re: Gouging

>> if you submit your CV for a role - and they explicitly state they want doc format -

Submit it as a PDF and tell them to fsck off get with the times.

I was under the impression that documents all over the internet are to be found as PDFs.

I honestly don't know anyone that distributes doc files anymore.

Stop spreading this FUD!

8
7
Meh

Re: Gouging

'Submit it as a PDF and tell them to fsck off get with the times.'

Good luck with that approach.

4
1
Silver badge

Re: Gouging

>I honestly don't know anyone that distributes doc files anymore.

Just because your dole office doesn't use word files doesn't mean nobody does. For better or worse .doc is the de jure standard for editable text documents in the working world or at least most of it (which makes it a reasonable request).

Yes pdf is popular, very popular infact, but some companies still specify .doc. Quite probably just to give you another hoop to jump through. It's an easy way to filter out beligerant twats. Do you honestly think if you told them to feck off and sent them a pdf they would go "ohh thank you, you are just so awesome have a job, in fact have 2".

5
3
Silver badge

Re: Gouging

make that de facto, not de jure. What did the Romans ever do for us etc.

1
0
Silver badge
Coat

Re: Gouging

As far as Microsoft is concerned I would rather talk about lock-in than monopoly and market forces. If there are several brands of red wine with different prices then, yes, market forces and with only one brand, monopoly.

It's the lock-in that Microsoft is playing.

3
0
Silver badge

@The Axe

More right than wrong, but some of the nits matter.

In a free market the price and demand curves meet at the clearing price which maximizes production and consumption. In monopolistic markets that point is manipulated to create what is usually called an "economic profit." Price is normally set to maximize that profit. In a free market, new competition enters to undercut the current producer because of the economic profit. The only practical monopolies are government created ones like Ma Bell was in the US.

Microsoft and Adobe do have somewhat monopolistic markets because the critical point is the interchange format. Most businesses buy Word because Word is the format in which they receive documents from other businesses. Likewise a business is likely to save on training costs if they use the same software everybody else is using. It's worth noting that before about 1990 there were changes in market leaders as we went from Wordstar to WordPerfect to Word. Until then nobody ever really captured more than 60% of the market. At the time it happened MS used their monopoly position in the OS industry to undercut the pricing of WordPerfect. They were never taken to court for it. But because they now control more than 80% of the market, it is nearly impossible to dislodge them. While it is true they could set prices too high, it is also true that they have a fair amount of price setting leeway and leverage. Probably not as much as the politicos and writer of the article assume, but not as little as they claim.

0
0
Silver badge

Re: Look at drug prices

Drug prices in the US are as high as they are because you losers aren't paying the freight for the R&D, WE are. Kill that golden goose and you kill a whole lot of real people too.

0
4
Silver badge

Re: If they set their prices too high

Okay, test case:

What would Microsoft sales of Windows 7 Professional be if they set the cost of the software at 10,000 Euros per copy?

Yeah, that's right, they can't really set any price they want to for their product. They do have some control, but their objective is to maximize economic profit, not price.

0
1
Silver badge

Re: Look at drug prices

Erm I live in the US :-) Trust me, my health insurance is $650 per person per month, I'm pretty sure I am single handedly paying for SKB's r&d budget. Yes the US coughs up the most for drugs because the system is bent and other countries figured out that its cheaper to collectively bargain for drug prices. Along with tort reform and cross state insurance sales, knocking insane drug pricing on the head would bring insurance prices down or at least leave other countries to pick up their fair share of the tab.

1
1
Silver badge

Re: Look at drug prices

I work in the US and have never paid that much for my insurance, including my employer contribution (which they've all been pretty up front about). If you're paying that much it's because somebody else in the chain is featherbedding. If we had passed Reagan's solution way back in the 80s I know I'd be sitting pretty for health coverage when I retire 25 years from now. Instead we keep getting socialist plans and the costs keep going up.

1
5
Silver badge

Re: Look at drug prices

I'm self employed. I have a choice of 3 main providers, my location probably adds some to the price but all 3 are the same price give or take a few bucks. They've had 10% rises the past 3 years. The insurance companies don't actually seem to make much profit although thats easy to hide.

0
0
Silver badge

Re: Gouging

"Do you honestly think if you told them to feck off .."

They might think you have some backbone, are prepared to be different and adaptable

1
0
Silver badge

Re: Look at drug prices

Whilst you are probably correct about Ronnie Raygun the same could be said for Beveridge or Bismark. They both had plans for 'socialist' healthcare which have turned out to offer the same standard or better and literally at a fraction of the cost of the US system.

I don't mind a socialist healthcare system, I don't mind a pure capitalist system either. I do mind paying 3x more than other countries for healthcare that ranks somewhere around 30th in the world. The problem with the system right now is not socialist vs capitalist, it is simply there to make lawyers and drug companies rich which allows them to buy off the tarts in Washington (who get free healthcare from one of Americas finest socialised healthcare systems) to keep things how they like it.

0
0
Unhappy

Re: Gouging

Yep, they can. technically and legally.

The fact that we may not like it is completely irrelevant.

Just like region coding.

2
0
bep

Re: @The Axe

A couple of points here. There are plenty of 'practical monopolies' that are not created by government, especially in the utilities area. Once an electricity generator of water company has started in a particular area, the barriers to entry for new competitors are huge. A second point; MS bundled Word with Excel in MS Office, and the accountants wanted Excel. Everyone else was happy with WordPerfect, but you couldn't get Excel with without buying the whole Office bundle, which made buying a separate word processing program a waste of money.

0
0
Vic
Silver badge

Re: Gouging

> I honestly don't know anyone that distributes doc files anymore.

Then you cannot know many people.

Whilst I would love for open formats to be the choice for document interchange, it's simply not the case. People *demand* .doc[x] files, even when they are entirely inappropriate for what is being done.

So while I usually submit PDF files when I can, there are times when to do so would be to ignore the instructions given by the customer. And that means I run the risk of not even being considered for the job.

To date, LO has been sufficient for my needs in this respect.

Vic.

0
0
Vic
Silver badge

Re: Gouging

> They might think you have some backbone, are prepared to be different and adaptable

If you ever got your CV to an engineer, that might be true.

But it goes to an HR department. And they don't appreciate "backbone"...

Vic.

1
0
WTF?

Same old same old....

This is also as true in New Zealand as it is in Australia. That said, New Zealand companies (Fonterra, Fisher and Paykell, etc) are just as likely to price gouge in their local markets. Why does NZ milk cost more in NZ than it does in overseas markets, why do Fisher and Paykell whiteware products sell as three times the price in NZ as they do in the UK?

"What the market will bear" has something to do with it, as too does consumer ignorance.

4
0
Anonymous Coward

Re: Same old same old....

Didn't know I could buy fresh New Zealand milk in the UK?

0
1

Re: Same old same old....

You can buy NZ butter - Anchor isn't it?

0
0

Re: Same old same old....

Whatever stops your boat from floating away.

0
0
Silver badge

Re: Same old same old....

Anchor used to be made from New Zealand milk, but it is now made from English milk.

0
0
Silver badge

Re: Same old same old....

Anything with the Arla brand on it is from NZ for starters.

0
1

"Anything Arla is NZ"

Hm... The Danish part of NZ, that is.

0
0
Mushroom

I doubt anything will change anytime soon but it is good to see these prats being put on the spot, the price difference and geoblocking is disgusting and needs more attention.

3
0

Re: I doubt anything will change anytime soon

If that's turns out to be the case then the very politicians should then be put on the spot for failing.

0
0
Silver badge

Re: I doubt anything will change anytime soon

Are they failing? They are doing exactly what the highest bidder pays them to do. We just aren't the highest bidder :(

0
0
Pirate

good for the soul..

Everytime I read about how the corporates gleefully rob us blind 'legally' - I feel a little less conflicted about downloading an (ahem) 'Linux Distro' from Bittorrent.....

6
2

Re: good for the soul..

What's rather ironic about that is that to a considerable extent you are playing Microsoft's game for them. When you look at how they've played their monopoly games over the years its pretty clear to me that one of their keyaims is to destroy competitors by denying them an income stream.

For example in the early days of Windows there were three or 4 good presentation graphics programs, all fairly expensive, but justifiable, and all earning money to pay for development. Microsofts, powerpoint, was cheaper, but lousy, and no-one bought it. So they decided to give it away free with copies of Excel and Word and call it Office. The result was that the competition was starved of income and disappeared, so now there's only Powerpoint.

So if people pirate MS products then no-one else is getting any income from them and Microsoft dominate the market and define the software ecosystem. MS then attack the pirates and reinforce their monopoly. So if you truly wish to see the end of MS dominance the most important thing you can do is to spend money with the competition in what ever way they get their income stream... Open source companies still need money from somewhere to pay the bills.

13
0
Silver badge

Re: good for the soul..

Just curious, I remember lotus freelance, what else was about? Not picking holes, just my brain getting old!

0
0

Re: good for the soul..

As well as Freelance I remember Presentations which came with the WordPerfect Office Suite.

My copy of WordPerfect Office was bundled with a PC and I think it was the NT variant mentioned here, because it although it came with a Win98 system I swiftly upgraded to NT4 and it ran fine there.

1
0
Silver badge

Re: good for the soul..

Harvard Graphics and the one that came with the Corel Office Suite. Now the competition is Keynote.

1
0
Silver badge

Re: good for the soul..

Thanks!

0
0
Linux

Re: good for the soul..

All those are certainly examples of alternative presentation applications, and I'm certainly no MS apologist, but I can't help noticing they are *all* also bundled as part of a suite. Surely all htose companies were playing the same game, trying to bundle enough stuff together to make it all viable as a combined proposition. MS were able to win because they had an OS monopoly, not an office applications monopoly. That's still largely true today, though current trends in mobile may change the rules a little.

That Adobe also managed to gain such a huge monopoly mindshare in graphics software is largely down to their early footholds on the early Macs and the continuing dominance of Macs in that area to this day.

BTW, I'm a pro photographer employing a small staff who all use Linux exclusively. LibreOffice, Gimp, Inkscape, KDEnlive, Blender and suchlike all perform exactly as I need and I have absolutely no problem producing saleable, publishable work. There is another way. And it does work very well indeed.

4
0

Re: good for the soul..

I don't believe they started as bundles: MS were responsible for that fad.

Aldus Persuasion was one I liked a lot that hasn't been mentioned so far.

1
0
Silver badge

Re: good for the soul..

Interesting, I did and to a lesser extent these days do the same job. Did you find it took a while to get up to speed with gimp? Do you use a free alternative to lightroom? I haven't upgraded ps in years, it just hasn't made sense, but LR paid for itself literally the first day. My post time went down to 1:1 against shooting time which meant I could book more work although I came from film so I tend not to do much post anyway.

0
0
Black Helicopters

Re: good for the soul..

Consumers, especially governments, want stuff cheap so will use the weaker product if it's bundled free. They will naturally buy into loss-leader discounts not caring that they will get boned at some future date. I saw the CIO of a UK Healthcare Trust literally turn white when he got details of an updated MS Site license price lis a couple of years backt.

Incompatible file formats has been able to maintain the power balance since the early 90's and that's not going to change anytime soon.

Remember It's a war for companies and they will use any and all means at their command to deliver growing returns to their investors.

Like it or not that's capitalism - Capitalism Red in Tooth and Claw.

0
0
Megaphone

And for the Gamers out There:

Modern Warfare 2 is 365% more expensive in AUS compared to the US, $20 compared to $90. That's pretty bold for a game barely worth $20.

2
0
Silver badge

Re: And for the Gamers out There:

Did you pay the $90?

Either way you have proven the "vote with your wallet" concept. There's no need for Govt to step in unless you want them to determine what you can buy.

0
3
Anonymous Coward

Re: And for the Gamers out There:

Disagree. I've been moving between Europe, the US, and South America and its a minefield for Xbox gaming alone.... Vote with your wallet in many locales means buying or not buying with no third option. That isn't much of a choice. Three examples in point:

#1. If you order a game from overseas at a lower price, when you enter your address the rights holders can block vendors from shipping to you. This happens frequently on Amazon!

#2. If a game or DVD or BLUE-RAY has region lock-in then your cheap copy from overseas won't play!

#3. What if you want to buy a full game console from overseas so your old games bought in another region will play? You can't, Its barred! For instance try buying an Xbox off Amazon.com and having it shipped to South America!

1
0
Silver badge

Re: And for the Gamers out There:

True, but MW2 is not a monopoly in any way, if they are charging $90 for it they believe that will give them the most profit. There are other similar games out there so if you want the price to drop, don't buy it and it will drop.

0
1
Megaphone

Re: And for the Gamers out There:

No, I personally didn't pay $90 for that game, I found it funny because I have several friends who did, I've always maintained that Battlefield was a better series, especially considering its "only" $50 for BF3.

If the Call Of Duty series was priced fairly I'd happily by their games, they're fun, but at $90 it's ridiculous. It's like paying $25 for Infinity Blade on IOS, still a fun game, but not at that price.

0
0
Thumb Down

Makes Torrent look good.

I have experience first-hand Adobe's " a “personalised and local” experience" when trying to upgrade LightRoom ($99 in the US, $149 here).

The “personalised and local experience” amounts to a message in cyber-speak that basically says "F#ck off!, we have you by the short and curlies".

Makes Torrent look good.

1
0

Page:

This topic is closed for new posts.