After comparing Netflix pricing and products to those of the closest offerings in Australia, Quickflix and Foxtel, consumer lobby group Choice has ruled that Australians are being ripped off.
The organisation's campaign director Matt Levey said that a comparison between the three showed that Australians are being treated as "second-class digital citizens".
"Netflix in the US costs only US$7.99 per month and features a hit parade of shows including Breaking Bad, The Walking Dead, House of Cards, and Arrested Development. Back catalogues of most series are available for instantaneous viewing, along with other popular TV shows," he said in a statement.
"In Australia, Quickflix subscription costs range from AU$15 to AU$35 per month, and you pay extra to watch some movies and TV shows. Also, it uses DVDs for new-release movies, while Foxtel charges AU$72 per month."
Netflix's popularity rose in Australia particularly around the release of House of Cards and the new series of Arrested Development, with many located in Australia resorting to virtual private network (VPN) services to get around the geo-blocks Netflix has in place to prevent access to the site from outside the countries where the company has launched.
Levey said that Choice is encouraging Australian consumers to get around geo-blocks to pay for legitimate content, and has provided a guide on how to do it since May, but warned that the practice could be in violation of the terms of service.
"Depending on terms of service, risks could include having your account suspended, or restricted access to content you have already paid for," he said.
The legality of using VPNs to access content is still a grey area. Using a fake US location to sign up to Netflix while residing in Australia would be a violation of the terms of service, and Netflix could, if it chooses to, cancel your subscription. The company at this stage seems unfazed by Australians using the service, however, and currently accepts Australian credit cards.
One difficulty could potentially arise, because technically, under US law, violating the terms of service for a website could be considered a crime in the United States.
When ZDNet inquired as to whether Choice had obtained legal advice on whether it can advocate the practice, a spokesperson pointed to comments from then-Attorney-General Robert McClelland in 2011, who said it did not appear to violate copyright law in Australia.
The courts in Australia have yet to test a case such as this, but there are parts of Australian legislation that content owners could potentially rely on if they decide to attempt to stop Australians from accessing Netflix and other streaming services that are geo-blocked in Australia.
Section 474.7 outlines that a person could face two years' imprisonment for modifying a telecommunications device identifier, while under Section 476.2, a person could be charged with having unauthorised access to data. Under Section 478.1, a person could be charged with having unauthorised access to restricted data through bypassing an "access control system", which could potentially include geo-blocking.
The content owners would first need to make a complaint to police and prosecutors, who would then decide whether to pursue it. Phipps said that just because these powers were available to police, it doesn't mean that they will use them, or would be able to convince a judge of this interpretation of the law. He said he was not aware of anyone in Australia being prosecuted for using a VPN.
The Choice spokesperson said that Choice seeks legal advice where appropriate, but would not discuss the legal advice it received in this instance.
"Choice is confident in its position, and we would like to see an end to digital discrimination against Australian consumers," the spokesperson said.
The IT pricing inquiry being conducted by the Australian parliament has been examining the practice of geoblocking in Australia, and a Greens Bill before the parliament would seek to remove geo-blocks from websites such as Netflix.
TorrentFreak reported on Wednesday that Visa and MasterCard have begun cutting off access to their services by VPN providers.