Editorial: Kiwis being ripped off by tech giants

For some reason Kiwis are paying a larger premium for local artists' work on iTunes than people in the United States.

A consumer advocacy body has slammed the price difference as "very unfair" because the music giant can charge what it wants as it dominates the market.

Quite why we are being charged so much is unclear, although an iTunes spokesman says it has something to do with sales tax on the day of the download. He then added that the company endeavoured to offer "competitive prices on current selections".

Big differences in pricing for an electronic service that should cost roughly the same no matter where it is being downloaded doesn't sound very competitive to me.

As one commentator pointed out, we are a captive market and "they're grinding as much out of us as they can".

Thank goodness the Australian Government has decided to do something about it.

The issue made headlines after Apple, Adobe and Microsoft were subpoenaed to appear before a parliamentary inquiry in Australia into why consumers pay a premium for electronic products.

iTunes charges $2.39 for NZ downloads of Gotye's single Somebody that I Used to Know, which features Hamilton-born Kimbra and won two Grammy awards.

In the US, the same single costs just NZ$1.51 - 88c less.

The price discrepancy between the United States and New Zealand is not just limited to online music sales.

An Xbox 360 250GB console costs $479 here, but just NZ$353 in the US.

The subpoena seems to have had an impact already: Adobe has announced it is set to cut the price of its Creative Cloud subscription service from A$62.99 ($75) a month to A$49.99, in line with the price US customers pay. The cost of subscriptions to individual applications will also decrease, to $19.99 a month.

Good on the Australians for applying some pressure on these multinational companies to explain their charges.

Perhaps the New Zealand Government needs to have an inquiry of its own to ensure that Kiwi consumers are getting a fair deal.