Online retail giant Amazon will block Australian consumers from its global sites to counter new laws to force it to collect the good and services tax on transactions.
From July 1 when the new GST regulations begin, Australian consumers shopping on Amazon international sites will be redirected to the local Australian site.
Amazon said on Thursday it will force Australians to use its Australian website instead of its much larger US site to avoid a new sales tax, setting the stage for a showdown with rival eBay Inc in the No. 12 economy.
The retail giant said it would subject Australians to the process known as “geoblocking” from July 1, when a 10 percent Goods and Services Tax (GST) applies to imported online goods worth less than AUD1,000 (USD756).
“While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites,” an Amazon spokesman said, adding that the firm was taking the measure to comply with the legislation and not to avoid paying tax.
The move will likely drive traffic to Amazon’s Australian website, testing the patience of shoppers who have complained about its thin product range – a tenth the range of its US site – and uncompetitive prices since it began taking orders in December.
It may also benefit Amazon’s main rivals, from California-headquartered online market eBay to smaller Australian merchants which had campaigned to have the GST apply to all goods shipped from overseas.
National Retail Association CEO Dominique Lamb said Amazon’s move was a surprise.
“You have to wonder if they are trying to funnel more traffic to its Australian website,” she said.
An eBay spokesman said the US company was working on a way to collect the Australian tax from sellers around the world without cutting access for Australians.