Online Shopping Boom in Australia


 Online Shopping Boom in Australia

Australians are spending large sums of money online with the advent of technology. The likes of Amazon, eBay, and Alibaba are increasingly popular among people who want to buy goods on a global scale at low prices. Online shopping boom is going dangerously high in Australia as the country's residents expect to spend a whopping AU$36bn in 2018.

Online shopping is growing in the country as more people use their smartphones to make purchases. However, the government may look at way of regulating digital commerce via a new law which will impose restrictions on online shopping.

Economy Minister Mathias Cormann revealed that the federal government is planning to introduce a law which would place limits on the way companies such as Amazon and Alibaba operate in Australia. The new regulations will be enacted from July 1, 2018 and are expected to go into effect next year.

The Department of Treasurer and Deregulation (DTDR) is leading the legislation after receiving feedback from industry experts and stakeholders. The department has already set up an online forum for interested parties to provide their comments on this proposed bill.

Analysts think that the government is still unsure as to how to regulate online commerce in Australia. They may also want to target cross-border e-commerce which has been growing at alarming rates across the country.

"The Department of Treasury and Regulation has put out a discussion paper for feedback for two new bills that cover value added tax (VAT) and customs duty," said Peter Gaudin, an associate professor of taxation at Monash University in Melbourne. "The first is to simplify imports from overseas and the second one is about sales tax collection," he added.

Australia's net online retail sales for 2017 totalled to AU$34 billion, this is a significant jump from the AU$21 billion reported in 2016. Online shopping boom has been happening in the country for several years now and online sales in Australia have been steadily growing.

"I think, the online shopping is going up massively," said Phyllis Nestor, an executive director at Retailers Association of Australia. "The number of online purchases is increasing massively around the country as people are getting more comfortable with it," she added.

Australia's online retail market is likely to grow further in the future. The country has been ranked as the most powerful e-commerce market in Asia Pacific and the tenth most powerful e-commerce market in the world by a research report by McKinsey & Company.

The study predicted that Australia's online retail sales will reach AU$130 billion by 2022, which is more than double what it was estimated last year. Unfortunately, one of Australia's oldest retailers, David Jones, may be shut down soon after it announced that about 75% of its stores would be closed down. This may have cut its revenue and profits while making it less competitive amongst other retailers.

Jaitley also told the Parliament that the government is planning to introduce a new bill in the upcoming session of Parliament to curb overseas companies from using data collected from Indian citizens. The bill will also allow an authority to reinstate penalty taxes on these companies which have been evading taxes.

The proposed law is against the Draft Foreign Exchange Management (Export and Import) Regulations, 2016 which provides for levy of penalty on such companies which have been engaged in abusing India's data. The Budget 2017 also allocated AU$10 million for this purpose.

The new regulations would require internet platforms to delete all data which would violate privacy of Indians when they were outside India.

The proposed bill will also include provisions for registration and regulation of entities that provide cross-border data services. It will also be given the power to restrict such services. This law may also use the method of screening transactions as well as financial accounts.

Analysts believe that the bill would target large US companies such as Facebook and Google. They have been facing issues in India over their privacy policies. According to experts, these companies have not only been selling user data but are violating Indian laws by transferring consumers' personal data to servers located outside India.

Facebook had made a similar proposal in 2016, but they refused to share any details about it. The proposed new law will allow the Department of Revenue to collect more data as well as information about the origin and destination of funds.

The new law would also impose limits on companies which are offering digital services to Indian users. This is expected to affect Google's application, Gmail, Google search engine, and YouTube among other things. It is also expected to affect companies which are operating in India through online portals such as Snapdeal, Amazon India, and eBay.

However, these regulations may not target WhatsApp groups or messaging applications as they are not considered "digital services" under the government's definition of what a digital service meant. The proposed law may include an exemption for WhatsApp as it does not host any user content.

The government would also give itself the power to block access to any site which is considered a threat to national security. The government will also give the right to request blockage of any digital service for 30 days at a time, this will be followed by another notice period of 14 days. All of this would be done with the help of an expert committee on cyber security.

If any company violates these rules, it will be fined as per its alleged failure to comply with these new regulations. The fines would be $275 million, or three times of the tax liability which the company failed to pay according to Australian Taxation Office calculations. Companies violating these restrictions could even face seizure of assets.

The bill would also require social media companies to appoint an officer who will be responsible for identifying a data breach. The officer will also have to provide written reports on all major data breaches. The bill will give the government the right to deduct AU$7,500 from every company which is found responsible for failing to comply with these regulations. Failure to provide information or under-reporting may result in a penalty of AU$375,000.

With growing concerns about security and privacy issues being raised by consumers about companies such as Facebook and Google, it has become necessary for Australia to introduce stricter legislation laws in the future.


The United States, the European Union, and the United Kingdom have already announced developing their own regulations on data collection and privacy. Facebook and Google are being investigated by authorities in the UK for manipulating users' news feeds for political interests. The US government is also likely to pass new web-browsing bill in July which is expected to give the Federal Trade Commission (FTC) more power over companies such as Facebook.

These countries are trying to increase regulations to avoid controversies like the ones which currently plague Facebook and Google. David Jones is planning to shut down most of its stores as it struggles with falling revenue. While there have been several attempts made in Australia before, this new proposed law may pose challenges for some of these companies.

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