/ Technology

International trade must be fairer to stop the Great British rip-off

Have you noticed that tech products often seem to be more expensive in the UK than, say, the US? Our chief executive Peter Vicary-Smith says Brits are still unnecessarily paying over the odds for some goods.

Sometimes, it rather feels like there’s a large sign above the UK saying ‘Ripe for rip-off’.

It’s 10 years since Which? first challenged Apple to justify why it charged UK consumers 20% more than those in France and Germany to download the same digital music track on iTunes. Eventually, Apple agreed to cut the UK price.

In the 1990s, Which? launched the ‘Great British Car Rip-off’ campaign, exposing the astonishingly high prices of new cars in the UK compared with the rest of Europe. Eventually, prices fell to be more in line.

The Great British rip-off

While UK consumers have benefited in some ways from a European Single Market, where there’s greater access to products sold elsewhere in the EU, we’re still paying over the odds for some goods, particularly many imported from outside the EU.

Our latest investigation, ‘The Great British rip-off’, shows that – taking tax out of the equation – a MacBook Pro laptop costs £194 more in the UK than it does in the US. Apple is far from alone. While companies selling their physical products, such as laptops, can point to higher operating costs in the UK (which is only a partial justification in the view of our supply chain expert), sellers of digital-only products, such as software, have no such justification. So why does certain software cost hundreds of pounds more in the UK than it does in the US?

While Which? is pressing manufacturers to play fairer, we’re also pushing the Government to boost e-commerce by dropping import charges for any goods with a value of less than £390. Not all products are subject to these fees (laptops aren’t but clothes and TVs are, for example). Longer term, we’re supporting an ambitious free trade agreement between the EU and US, which could cut all import duties on products from the US.

Are UK consumers ripped off on tech products compared to US consumers?

Yes (96%, 1,889 Votes)

Don't know (4%, 75 Votes)

No (1%, 11 Votes)

Total Voters: 1,975

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Comments
Member

USA software companies are notorious for ripping-off UK customers even where it is downloaded and this is taking account of VAT or USA Sales Tax. If I find a company doing it then I will avoid ever buying their products. Anti-virus software is one example but fortunately there are more global suppliers now. Interestingly Dell Computers have always had a very fair global pricing policy and if you compare their .com and .co.uk pricing it’s equitable which can’t be said for certain other large USA PC companies. I will not accept that a UK customer should subsidise a USA customer because that’s what it is; a subsidy. If we vote with our feet it will change.

Member
Jim Kent says:
28 August 2014

Some of you reading this forum may be aware that the campaigning group 38 Degrees has organised around 8,000 members to stage a national TTIP leafletting event next Saturday, August 30 in various town centres.
Major concerns are 1) permanent privatisation of NHS and other public services (by international service providers c.f. our US based funeral arrangers) and 2) the potential for foreign corporations to sue UK Gov (i.e. UK taxpayers) for potential loss of £M profits (from enacting new or revised UK laws) resulting in judgement by non-UK courts (as I recall, this has already happened with a Japanese company and the German Gov).

For more information see http://www.38degrees.org.uk/campaigns and the section on TTIP: Day of action.

“Check out the TTIP website to watch a video about the trade deal, read more information, sign the petition calling for TTIP to be fixed or scrapped – or to join a local day of action.”

Member

Unfortunately I am working so cannot be there.

Countries currently being sued by corporations are Canada and Australia by respectively US drug and tobacco companies. There are apparently 500+ cases currently being decided sloowly – normally theses cases are aginst small countries but for half a billion dollars why not have a pop. It may intimidate legislators in the future. A win win for the international corporations.

Against this background you do wonder how Which? manages to say it is broadly in support of TTIP. Who in Which? makes this call?

Member
Jim Kent says:
28 August 2014

A further thought – I wonder what TTIP discussion may take place (informally of course) during next week’s NATO conference in Wales. With Barack Obama and numerous EU heads of state tightly secured, it seems an opportunity (to discuss TTIP) not to be missed. Watch for the subsequent fall-out…

Member

When will ‘Which?’ expose the real issue of TTIP? Concern for price differential is a distraction from the serious issue that the proposal hands legal power to foreign entities, corporations & individuals to sue governments (aka tax-payers) in cases where healthful legislation impinges upon company profits. Eg. UK bans imports of a USA pesticide as too dangerous to human & wild-life: That US company can sue for loss of profits – sounds crazy but that’s what has happened already. US companies have NO CONCERN whatsoever for fairness, for people of poor countries, for moral, or ethical truths. Search 38 Degrees/TTIP for more info on how campaigns all over the country are being organised for a day of public awareness in towns & cities this Saturday, 30th August.
Our pro-commercial politicians across Europe are ready to adopt this foolhardy measure; Why? Demand answers; stop this stupidity. People matter, profits must follow from fair enterprises.

Member

I agree that TTIP looks a disaster in the making. I am surprised that Which? is in favour.

Member
Jim Kent says:
29 August 2014

dieseltaylor, Art and terfar are quite right.

I thought Which? was run by the Consumers Association for Consumers, not a Corporate Trade mag for global investors. Are the Which? hierarchy reading this blog at all?

Fair enough to support SMALL UK businesses but not the global corporate leeches – that’s what they are – consider the US tobaconists objecting to the Oz cigarette packet re-designs…

P.S. thanks for the 38° support, Art.

Member

The current Transatlantic Trade and Investment Partnership (TTIP) negotiations are of significance to UK consumers. A successful deal could lead to benefits for consumers such as reduced prices and increased choice, as has been the case in many other free trade deals around the world. However, we recognise that there are also potential risks with the proposed deal, including concerns about investor-state dispute resolution (ISDS) and rolling back existing consumer protections.

As such, we believe that the negotiations should be as open and transparent as possible, and as a minimum, should safeguard existing consumer protections. We have therefore pressed the UK Government, the European Commission and the European Parliament to ensure that the consumer voice is heard in this agreement.

Member
Jim Kent says:
4 September 2014

Whilst I appreciate that you may find it necessary to use moderate forms of expression, I would suggest that the history of the 500 or so known examples of ISDS usage so far together with the billions of dollars or Euros that have subsequently been awarded against often poor countries, merits rather more than mere “concerns”.

I am also rather disappointed that TTIP’s fearsome potential for interference with the development of replacement NHS structures, even down to the local functioning of CCGs, is not more directly referred to despite clear evidence of strong public feeling, and is reduced to a plea to “safeguard existing consumer protections”.

As for being “open and transparent”, these negotiations are so transparent as to be virtually invisible and their openness little more than smoke and mirrors. Poof, l say!

Member

” Longer term, we’re supporting an ambitious free trade agreement between the EU and US, which could cut all import duties on products from the US.”

I am still concerned as to the “We’re supporting” as I would like to know where the subscribers to Which?, or the shareholders of the Consumers’ Association even, have been included in this decision. Or is it simply the Which Ltd Board ? Or possibly the senior team of Which?

I have seen no poll, no campaign to explain TTIP ramifications, nothing in the Connect surveys, nothing in the magazine. BEUC the European body for Consumer organisations has been much more outspoken on the TTIP negotiations and the difference between its stance and what we are hearing in the UK from Which? is disconcerting.

” The ongoing Transatlantic Trade and Investment Partnership (TTIP) negotiations are being conducted behind closed doors, with the public having no way of knowing what is at stake aside from officials’ statements.
When it comes to informing citizens on the issues being negotiated within TTIP, the European Commission as our official negotiator, has a monopoly on the words. Crucially, it is the accuracy of these words which will frame people’s perception of what is still a distant outcome and define the legitimacy of the negotiations.
This reality is the reason which led to two civil society organisations – BEUC and Friends of the Earth Europe – to question the way in which the Commission uses figures in their Economic Impact Assessment of TTIP.
In a letter addressed to Commissioner for Trade, Karel De Gucht, we have underlined the importance of language as a means to mould and too often mislead public opinion on issues related to TTIP.
Both organisations stress that the Commission is projecting an overly positive economic outcome and hushes the grimmer economic scenarios…………”
http://www.beuc.eu/blog/the-european-commission-the-importance-of-unbiased-communication-on-ttip/

Member

Hello Desiel, thanks for your comment. Which? campaigns and policy positions are determined by a number of different factors. We hear directly from our members and supporters about the issues that concern them. And, as a registered charity with a mission for all consumers, we also undertake market research and analysis to understand the challenges that all consumers face. We also have a team of policy experts who research each issue to determine our position. As such, we don’t test all our policy issues directly with our members through the magazine or Which? Connect, but any views we do get, such as right here on this Convo, help us shape them. Thanks to you and others for letting us know how you feel about this issue – we’re taking it all on board.

Member

Thank you Patrick for that answer.

I am glad that there are policy experts as with a substantial number of Which? Directors /Trustees being retired from careers with, or employed by, Unilever and Proctor & Gamble two of the world’s largest conglomerates it may have seemed inappropriate for them to be supporting what for many is seen as a treaty that benefits multi-nationals.

However regarding the policy experts the pan-European BEUC representing most of the major consumer organisations of the EU is complaining that there is no visibility of what is being negotaited but the experts advising Which? are able to give a qualified view in favour.

As to be expected with over 500,000 thoughtful Which?readers could these experts reasoning be shared with us. I assume the policy papers cannot hold any secrets.

Member
Vipul Patel says:
10 September 2014

“A successful deal could lead to benefits for consumers such as reduced prices and increased choice, as has been the case in many other free trade deals around the world”

Yes, by reducing compliance standards – the very thing that Which? is famous and respected for upholding! No company is going to reduce prices in return for increasing its quality or ethical standards, so how does Which? come to such a contradictory and blinkered position?

“As such, we believe that the negotiations should be as open and transparent as possible, and as a minimum, should safeguard existing consumer protections.”

But we all know that this is not happening, so how do Which? justify their position demonstrably contradicted by the evidence?

Here’s a nice video summing up the fallacy of the Which? arguments and justification, please do look at this before coming out with glib replies.

http://youtu.be/pVawHtGlzH8

Member
Jim Kent says:
11 September 2014

According to their website, “BEUC is managed by an Executive composed of 10 representatives from our member organisations, who are elected by the General Assembly for four years”. Interestingly, one such is supplied by Which?, but ‘our’ rep is both nameless and faceless, having just a female silhouette. Might this imply a gap (or possible coyness) about the linkage between BEUC and Which?
See the bottom of the page http://www.beuc.eu/about-beuc/executive

Member

Hi Jim, thanks for your comment of concern. We’re still very much a full member of Beuc, but we’re currently between reps. As soon as the new rep is confirmed we’ll make sure to get it updated on that page. In the meantime, you can see our full member page on Beuc’s website here: http://www.beuc.eu/beuc-network/members/which Thanks.

Member
Vipul Patel says:
12 September 2014

Here’s the EU Commissions response to your suggestion that they consider the views of consumers:

EU Commission wants to wipe out citizens’ involvement in TTIP and CETA – http://stop-ttip.org/eu-commission-wants-to-wipe-out-citizens-involvement-in-ttip-and-ceta/

230 organizations from 21 EU countries oppose or have serious reservations.

The BEUC “…e have serious reservations regarding the proclaimed potential benefits, should they come at the expense of con-sumer, health, environmental, labour and safety standards in Europe”
http://www.beuc.eu/publications/beuc-x-2014-032_ttip_factsheet.pdf

I don’t suppose that Which? would now like to put the interests of your 1.4million subscribers ahead of your curious support for David Cameron’s ‘race to the bottom’ on standards and this TTIP farce designed by and for the multinational corporations?

Member

Just as a point of information it is 1.4m subscriptions rather than 1.4 unique subscribers. I used to have three subscriptions and now only have two. The actualt total of Which? subscribers I believe is somewhat south of 1 million and my guess is around 620,000 for the magazine and that includes 250,000 as on-line subscribers.

Member

Erm. Aren’t the last few comments a bit off topic?

Member

daibell – I am not sure how it can be off-topic as it directly addresses a statement in the opinion piece:

“Longer term, we’re supporting an ambitious free trade agreement between the EU and US, which could cut all import duties on products from the US.”
Peter Vicary-Smith CEO of Which?

The question who are “We” is a logical question that follows on from the statement – and which remains unanswered.

Member
DaveS says:
1 September 2014

If you think tech-products are overpriced compared to the US have a look at power tools.

For example, consider the Bosch GTS 10 table saw. The cheapest I could find in the UK is £474 while the equivalent model (GTS1031) is $359 (£216) at amazon.com.

Member

Does that include postage and import duties? If not it is hardly a fair comparison.

Bosch I imagine sell at a lower price in the USA because they have to in order to compete with De Walt etc. I guess its rather like charging English plumber prices in India – you charge what the local market can bear if you want to get any business.

I do wonder if the GTS 310 is made in China and the GTS 10 in Germany and they use different quality components.

Member
DaveS says:
2 September 2014

It doesn’t include postage and import duties but is a fair comparison – I’m comparing (as is the Which investigation) the cost to consumers in the UK versus the US.

Yes they charge what the market will bear but isn’t what the ‘Rip-off’ article is about?

No idea where the saws are made but they look virtually identical.

Member

It isn’t just tech. We recently went to Canada for a holiday, and my son asked for a toy that his Canadian cousins had for his birthday.

This is it on ToysRUs canada: http://www.toysrus.ca/product/index.jsp?productId=13277066

$19.99 plus taxes = £11.20ish at today’s exchange rate before taxes.

Here it is on ToysRUs UK: http://www.toysrus.co.uk/Toys-R-Us/Toys/Games/Games/Angry-Birds-Star-Wars-Jenga-Death-Star%280100868%29

£24.99 including VAT – so £20.83 before taxes.

How can a price almost double be justified in the UK?

Member

I think what a lot of these USA companies do, deliberately or thru ignorance, is to include all their USA and Global overheads in their ex-USA transfer pricing and then they treat their complete overseas operation as a ‘Sales’ channel and add all the overheads for this foreign ‘sales’ channel onto the price in the foreign country. This means that the USA customer only pays one lot of overheads but the foreign purchaser pays for two lots of overheads including the full USA one. I’ve worked for several USA corporates and some e.g. Xerox treat the world as one global place. Others such as a certain very large computer software company and others segment the world and play this game. The only way to stop this is to vote with your feet or do a grey import.

Member

How disputes get resolved under these trade treaties:
“When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all … Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.”
-Juan Fernández-Armesto, arbitrator from Spain
“Arbitrator and counsel: the double-hat syndrome”,
Global Arbitration Review, Vol. 7 – Issue 2, 3/15/12.

Member
James Blair says:
5 November 2014

Having been a member of which for over 30years I will be cancelling my subscriptions shortly
if Which and Peter Vicary-Smith continue their support for TTIP( Transatlantic Trade and Investment Partnership) .

I hope others will do too.

http://www.independent.co.uk/voices/comment/what-is-ttip-and-six-reasons-why-the-answer-should-scare-you-9779688.html

http://www.theguardian.com/commentisfree/2013/nov/04/us-trade-deal-full-frontal-assault-on-democracy

Member
James Bryant says:
5 November 2014

Which? does a lot of good. TTIP should also do a lot of good, even though it is far from perfect. To insist on perfection (by one’s own standards) is a sure recipe for disaster when negotiating with many different interests for something which will benefit all of them. Please don’t go.

Member

One problem with TTIP is that disputes between, say, US corporations and the UK Government might be decided by extra-territorial tribunals run by lawyers who are accountable to nobody. We know what bullying tactics and commercial pressures can be exerted by large corporations; I don’t want to see contracts and privatisations being forcibly awarded because of fear of us being ineffective in defending our national interest against such people.

There may be benefits to TTIP but we need to discard the disbenefits. The EU recognises this; why does not our own Business and Innovatinons Dept? We appear to have handed responsibility for negotiating it to someone who, it is said, is keen on big corporations suing governments as ameans of expanding business. In the public interest?

Member

I think the matter is slightly murky as there is apparently no policy paper available and the support seems to be derived from a speech by our CEO. Which? kindly provided a link for me. The speech had caveats about ISDS but the fact remains is that pverall the CEO has given the impression that Which? is in support.

As I have said previously the BEUC site – Beuc representing the consumer associations of Europe – is far far less sanguine. The benefit figures that are publicly voiced in the negotiations are seen to be suspect so the whole case is suspect particularly as of course the negotiations are highly secret.
http://www.beuc.eu/press-media/news-events/how-improve-transparency-ttip-negotiations

It may be true to say that some regions may suffer more than others within the EU which provides another complication in the process.

However I think it unwise to resign if you are an Ordinary Member of the Consumer Organisation as the AGM is only weeks away on Monday 19th November. If you can attend do so. If you have lost your proxy form sent at the beginning of August the Electoral ReformService will provide another. AGM’s generally are fairly restrictive but voting against the standard resolutions is a traditional way to say you are unhappy.

If you google “wikia consumers association” you may find more.

Member
Software company says:
2 December 2014

[This comment has been removed for breaking our community guidelines. Thanks, mods]

Member

Didn’t we all talk about this in 1980?

and every 5 years since then.

Member

Basically anything is priced at what the market will bear, not what it costs to produce. If people refuse to buy then the price will fall.

Member
Matt says:
18 June 2017

3 years on, nothing as changed.
Still living in Rip-Off Britain and it will get worse after Brexit

Member

What worries me Matt is what deals HMG will do with the USA which involve usurping the right of British citizens to determine who gets contracts in local government as the USA wants BIg Business to be able to sue your local council if they give it to a BRITISH company regardless of who puts in tenders . This is a basic law of this country another country can and will overule the wishes of the voters in a democratically elected council . For those disagreeing which one of you is going to FORCE “the Donald ” to overrule the American Bill of Rights and the Declaration of Independence , never happen !!. Thats what was hidden from the British public for a long time by secret conferences in various countries – well are we just a satrap of the USA ?