Geo-block escapes putting pinch on content owners

Internet users who circumvent blocking mechanisms on overseas content via legal and illegal means are pressuring vendors and rights holders to change their practices, according to the Australian Competition and Consumer Commission (ACCC).

The consumer watchdog told members of the parliamentary committee inquiring into IT pricing that attempts to restrict overseas purchases had failed to deter "savvy" users and could lead to a powerful consumer backlash.  

The ACCC said that despite technological counter-measures such as geographic restrictions and encryption, overseas vendors had been unable to prevent Australian consumers from purchasing their products abroad.

“These days, savvy Internet users do have available to them ways in which they can circumvent these types of [blocking] mechanisms,” executive general manager of the ACCC's enforcement and compliance division, Marcus Bezzi, said.

“There’s a range of means, including virtual private networks, proxy severs and redirected DNS which can disguise their Australian location.”

Bezzi also cited the use of mail-forwarding companies, which allowed consumers to have products forwarded on to them.

Currently, the ACCC does not have the power to pursue companies that attempt to prevent Australians from buying overseas versions of its products, unless the block is in place for anti-competitive purposes.

“From our point of view as a competition regulator, the importance of these things is that they put some competitive tension into the market," Bezzi said.

"If it becomes big enough, those circumvention methods – and the capacity to illegally download – can start to have an impact on sales, and we’re aware that can have an impact on the market.”

Bezzi gave the example of Australian television networks bringing forward their broadcasts of popular overseas programming in response to consumers obtaining the content elsewhere. 

He acknowledged that circumvention methods had limitations, particularly when it came to businesses purchasing software platforms that required regular updates.

Bezzi also said that much of the ACCC's knowledge on the topic was "anecdotal" with no empirical data to support its claims.