Amazon Disconnects From Australia After Government Hits It With 10% Tax On All Imported Items

Having tried and mostly failed to regulate Wild West internet commerce, legislators have now decided to take a more "hands off" approach to the intersection of communications and commerce. That's what I would be writing if we lived in a world where people learned from their mistakes. But they don't. Whatever has failed a half-dozen times in previous iterations can be rebooted, doubled-down on, and otherwise presented as a legislative solution for a "problem." And this "problem" is always the same. Incumbents who have somehow managed to parlay their fortunes into a "disadvantaged" position want tech companies to give them (or their government) money.

Link taxes -- otherwise known as "Google taxes" -- supposedly would allow publishers to recoup their "losses" from having Google send traffic their way. These haven't worked, and in the worst case scenario, Google has simply shut down its Google News service rather than pay for the privilege of referring traffic. Other attempts to make things "fair" for brick-and-mortar businesses competing with Amazon have led to similar outcomes. In one case, the French government decided Amazon could no longer offer free shipping on books to France. Amazon obliged, raising shipping to $0.01 Euros.

The Australian government has decided to go down the road well traveled and charge Amazon extra for beating local retailers at their own game. A new law goes into effect at the beginning of July which charges Amazon 10% tax for every imported good sold to Australians. One of the backers of the bill is retailer Harvey Norman, which had this to say about Amazon.

"They think they have the right to pay no tax in Australia," Harvey Norman's executive chairman Gerry Harvey said on Thursday of Amazon's decision to "blacklist" the country.

"They've done the dirty on the government. They've done the dirty on the public."

And what is this "dirty" Amazon is accused of doing? Nothing more than deciding the beneficiaries of Australian tax dollars -- mainly Australians and Australian merchants -- should pay the 10% tax. In response to the new law, Australians have been cut off from Amazon's main feed.

Amazon said that Amazon.com, its American website, and other overseas sites would no longer ship to Australian addresses from July 1.

Shoppers visiting those sites will be redirected to Amazon.com.au, which launched late last year and stocks about 60 million products, compared to almost half a billion on its US site.

There you go. The "playing field" has been levelled, as proponents like Harvey Norman requested. Local retailers will now only compete with Amazon's local site. How much "fairer" could it get? And yet, they're complaining that the level playing field is also "doing the dirty."

Australians aren't happy about this. The limited selection they'll be forced to purchase from doesn't give them nearly as many options as Amazon's US site. The playing field is so level all Australians will be frustrated equally with their inability to source obscure goods and/or the hassle of using reshippers to get products local retailers don't carry.

"Australians are very isolated and it's the likes of Amazon that have enabled consumers to have more variety, said Darren Price, a Sydney-based tech writer.

"Otherwise you end up waiting for whenever Harvey Norman is going to get it in stock."

Mr Price - who spends about $500 a year on Amazon.com, mostly for computer components that aren't available locally - said he and many other Australians would likely get around the blockade by using package redirection services, which receive orders shipped to addresses in the US and then forward them to Australia.

In their desperation to punish Amazon for being successful, retailers like Harvey Norman have only managed to piss off customers already unhappy with their lack of selection. This mistake was compounded by the Australian government, which decided that tagging Amazon with the tax (rather than shippers or purchasers) would "cause the least disruption to consumers." I guess no one thought maybe a discussion with consumers might help define what is or isn't disrupting. Punishing one large company to help another large company really doesn't do anything but hurt consumers.