Geo-blocking is an online practice that prevents shoppers in some countries from being able to buy products and services for cheaper prices overseas, through internet service provider (ISP) restrictions. Unfortunately, it seems that not all retailers have embraced the web as a 'borderless world', and geo-blocking is a popular way of forcing Australians to pay more online.
Different prices for different countries
Restricting access to content based on where you are in the world is a popular strategy, and it's used far too often by multinational tech giants. Using copyright and licensing restrictions, they can set varying prices for their products in different places around the globe. The frustrating reality of geo-blocking is common for Australian consumers, and we're often charged hefty mark-ups on products from companies like Apple, Microsoft and Amazon based on our IP address, which is the numerical address that identifies our computers and their locations.
While Amazon, Apple and Microsoft are among the main culprits, online media streaming services like Netflix and Hulu also divide the globe into segments, only granting access to those with a certain IP address.
Australians pay more
A CHOICE analysis of online price discrimination in June 2013 looked at online prices for more than 200 products, and found that Australian consumers pay an average of 37% more for PC games, 26% more for software, 52% more for iTunes downloads and 28% more for computer hardware than our US counterparts. And that's even before you add GST!
Fortunately for Australian consumers there are other options, like Virtual Private Networks (VPNs) that let you bypass geo-blocked sites so you can access more content online and at cheaper prices.
Is bypassing geo-blocking legal?
The legality of getting around geo-blocking is a bit of a grey area. Some copyright experts claim that anyone who promotes devices or programs that encourage people to infringe copyright are breaking the law. However, CHOICE believes consumers who bypass measures used to geographically restrict copyrighted content should be exempt. Why? Because they're only accessing products and services that are being provided knowingly and willingly by the copyright holder.
It's legal to use a virtual private network (VPN) to protect your online transactions from hackers, and there's little definitive evidence about whether other uses of a VPN breach copyright law. It's also important to note that circumventing geo-blocks may breach the terms and conditions of the company you're buying from – and if you're found out, your account could be cancelled, losing credit and access to your downloads.
According to the ACCC, your rights when using overseas-based companies to buy products may not be protected by Australian law. While some companies like Apple have international warranties, others like Canon and Nintendo refuse to recognise products bought internationally under domestic consumer law.
Bypass geo-blocked media sites?
You can use VPNs to access TV, movies and media not normally available in Australia. As a client connecting to a VPN server that's in the same country as the site you're attempting to access, you have unrestricted access to media and services usually not available to Australian residents.
There are hundreds of free and paid VPN service providers available online.
Some popular options include:
Opening the Netflix or Hulu webpage while connected to a VPN server in the US allows you to successfully set up an account with them, if you use a legitimate US postal address.
The alternative to using a VPN is to adopt a US-based Domain Name System (DNS) server, like unblock-us.com, for about $5 per month. Rerouting your internet connection through a DNS server – easier to do than it sounds – can also trick the site you're trying to access into believing you're actually in another country.
If documentaries or international news are more your thing, you can access BBC iPlayer and international news networks, usually blocked here in Australia, in a similar way.
How do I get stuff shipped to Australia?
The price is often right with online retailers – until you reach the checkout and are told that shipping to Australia isn't possible. Third-party delivery services, like MyUS.com, Bongo and Australian-based company Price USA, remove physical shipping barriers, opening up new shopping opportunities for Australian consumers.
From computers to clothing, the basic principle is the same: you buy the product, enter the warehouse address of the parcel-forwarding service you choose, and wait until they redirect the mail to your Australian address. Some companies, like Price USA, actually buy the product on your behalf.
How do I pay less to play online games?
It's no surprise that Aussie online gamers are keen to find their way around geo-blocks, with the average cost of a game being 50% higher here. Access to the lower prices offered on the US version of online gaming service, Steam, is a difficult one to get around without a US credit card. However, the cheaper US prices for PlayStation 3 Online and Xbox LIVE can be accessed by buying prepaid vouchers, which can then be used to add credit to an account set up through a VPN, provided you also use a legitimate US address.
How do I set up a US iTunes account?
In the US iTunes store, the Beatles' No. 1 album sells for US$12.99, yet Australians fork out almost 60% more to buy it from an Australian IP address. To get around this, you can set up a US iTunes account by altering the country setting automatically detected when you open the iTunes store, and entering a legitimate US address instead. To get around the US credit card requirement, it's possible to make your first buy a free app, and later top up your account with prepaid US iTunes store gift cards bought from eBay.