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Friday, 20 July 2012 11:08

Aussie watchdog calls for end to Geo-IP

Written by Nick Farrell



Leads to dodgy charges


One of Australia's consumer groups has told the Government to ban region-coding based on Internet IP addresses.

The practice by foreign companies and Big Content is being identified as the reason why Australians have to pay more than half more on technology goods. The Aussies are holding an inquiry into why they are being ripped off and  consumer watchdog organisation CHOICE said Geo-IP reading was the tool for doing it.

Companies such as Microsoft have justified the charges based on the increased cost of doing business in Australia, but in its own submission to the inquiry, consumer watchdog organisation CHOICE said there was in fact little justification for the price rises and that the legality of geo-IP blocking should be investigated.

CHOICE said that the government needed to investigate whether technological measures that allow suppliers to discriminate against Australian consumers such as region-coding or the identifying of IP addresses should continue to be allowed. CHOICE considers these measures to be anti-competitive when they result in significant price differentials for Australian consumers.

In its submission, CHOICE examined a number of online stores such as the ones mentioned above, and found that the average price difference between Australian prices and US prices of the same products was approximately 50 percent.

Cost factors related to labour, occupancy and rent, GST, retail profit margins, logistics and transportation had been cited by retailers as being behind the local price rises.
But the organisation said that it was clear that these costs, even cumulatively, cannot account for the 50 percent price differences identified in IT hardware and software products.

Nick Farrell

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