We mentioned in the previous post the problems that are facing many digital retailers who are trying to see over the internet. The reality is that although the Internet should provide a level, global platform that is actually some way from the truth. Internet users have vastly different experiences and have access to different sites depending on their location.
For example you’ll find the same product or service available at different costs over the internet depending on your location. Buying the same flight, from the same airline can cost much more from one country that another, which is obviously completely unfair. The technique is called price discrimination and is the way that companies can maximise their profits by selling their goods or services at the maximum price possible. They do this by splitting up the markets, which is difficult but not impossible to do online.
The method involves allocating a price structure based on your IP address, or more specifically where the IP address is registered too. So if you arrive at the Netflix site from a French IP address then you’ll be assigned to the French version of Netflix. It can be gained to the customer’s benefit too, you merely choose the best value product then go and buy IP address to match that location.
The battle has begun then, at least those who have the technical know-how to fight their corner. Anyone else just has to accept the fact that you may have to pay more for a worse service than someone across a border than you. Often though you won’t have any access to that service at all – until recently for example Netflix was only available in a North America and a few European countries. However using these tools like VPNs or a Smart DNS proxy then a couple of million Australian users have been members for years without it being officially available there.
The market simply has to change and hopefully sometime in the future there will be a genuine, seamless digital marketplace where we all buy goods and services at exactly the same price. The European Union is pushing to create something like this in Europe but there is uncertainty about how high a priority this is currently.