When iTunes launched in Australia, a track cost $AU1.69. At that time, given the exchange rate, I don’t think it was too far off $US0.99.
Then iTunes introduced “DRM free” tracks for $2.10 each. I think the store defaults to offering you the higher priced format if the rights holder has agreed to sell it DRM free. Some tracks are available only as the $1.69 version.
Then the Australian dollar strengthened against the US dollar until the Au dollar was actually worth slightly more than the US. The iTunes price did not drop, so we were paying the equivalent of more than $US1.70 per DRM track that still only cost $0.99 in the US.
Around this time there was a lot of discussion about the “Australia tax” (the often inexplicable markup on goods here vs their US or European price). An example: One software package available for purchase online and delivered by digital download (so no shipping or domestic wage/operating costs to contribute to the vendor’s bottom line) was so much more expensive for Australians that it was cheaper to fly to LA and back to buy it from a US store than buy it online. ITunes got dragged into this because of the disparity between the US and AU prices, but I expect they are locked into contracts with the local rights holders that don’t allow flexibility with the exchange rate. That didn’t make it hurt less to pay so much more for the identical product (although, to add insult to injury, I think the Australian store has a smaller catalogue: less to choose from, but at higher prices).