Senate inquiry urges Australians to bypass online geo-blocks that can double prices for IT product
A Federal Government inquiry has recommended that businesses find ways to lawfully evade technology that allows IT companies to charge up to twice as much for their products in Australia.
The Standing Committee on Infrastructure and Communications found Australian businesses were paying up to 50 per cent more for IT products, compared to their international competitors.
Companies such as Microsoft and Apple use "geo-blocking" to stop Australian consumers from buying their products online in other countries.
The committee's chairman, Nick Champion, said geo-blocking was unfair when used to segregate global markets in order to make bigger profits.
He said the report's recommendations included educating Australian businesses on how to bypass geo-blocks.
"What we want to do is make sure that consumers are aware of the extent to which geo-blocking applies to them and the extent to which they can lawfully evade them," he said.
"That seems to be an area where I think, what is the consumer's right to shop around, in effect."
In March, consumer advocacy group Choice called on Australians to circumvent technology allowing companies to charge higher prices for their products in some markets.
Three giant IT companies - Microsoft, Apple and Adobe - gave evidence to the committee in March as to why their goods were more expensive in Australia than other markets.
Choice spokesman Matt Levey said the consumer group had published guidelines to help consumers circumvent geo-blocking.
"There's one particular creative suite product from Adobe which currently has a $1,200 price difference between the US price and the Australian price," he said at the time.
"Similarly with Microsoft, there was one infamous product where you could actually pay someone... to fly to the US and back twice, buy the product when they're there, and still come out ahead."
Among the reasons given by the companies to explain price differences were that they maintained separate websites and servers for Australian customers, and higher costs charged by the entertainment industry for content destined for the Australian market.
Freight charges, local sales taxes, levies, import duties, channel economics, competition and local laws regarding advertised prices were also mentioned by company managers who gave evidence to the inquiry.
However, Mr Levey said these factors could not justify what he described as price gouging.
"There were quite frankly some bizarre statements from Adobe relating to the 'bespoke and personalised nature' of their website," he said.
"You only had to look at social media very quickly to understand there were many creatives out there who were finding it quite an impersonal experience to be charged $1,200 more.
"Its attempts to try and sustain an outdated business model, which ... [carves] the world up into different regions, [charges] people in Australia way more than people in the US even though [consumers are] just a few mouse clicks away from actually identifying the price gouge."