It's both. Google don't do regionalized financial operations, despite the fact they have all necessary mechanisms in their google checkout. Product in US, sold in UK instead of being "amazoned" or masquaraded as product sold as Google UK, is instead sold as product in US sold in US, then brought over to UK. is They don't do it, as far as I can see, to avoid very difficult tax and duty situations, where apps from US, could be sold to UK consumer, while he was roaming outside of EC zone, thus requiring special duties and potentially even licenses and permits for stuff like apps dealing with proprietary access modes or encryptions etc etc.
Obviously, what they overlooked was the fact that most UK banks charge for foreign digital transactions, like they were performed while being abroad. I understand some of you might still have bank accounts that don't charge levy on foreign transactions, but trust me - at this moment I think there is only one or two type of new accounts in the whole country that don't do this. That said however. This situation is quite unique, and affects almost only UK. Most banks in EC, with few exceptions among old school, backwards banking systems, like France or Eastern Europe, have unified regulations and do not charge extra fees on top of exchange rate for transactions abroad, and even if they do, they are prohibited to treat local, internet transactions, the same way as physical, over the counter transaction in states would be.
So in essence - it is both - google shouldn't be doing US to UK sales as US purchases and your bank shouldn't be treating digital transactions as cash till payments in US with £1.50 levy, because it doesn't cost them anything. There is also a scenario, which if true and tested, could be used as legal angle and should prohibit at least one party involved from performing this whole malarky in the future:
Imagine you bought an app for ~61p from android market. Just to discover you in fact purchased an item costing $0.99, which worked out to be £0.75 using banks own exchange rate plus £1.50 transaction levy. You then decide product would be a good deal for 62p but not worth £2.25 with transaction fee. Ask google market for refund on Monday, they refund $0.99, your bank now calculates it to be £0.70 by Monday exchange rate, plus, potentially additional £1.50 for another US transaction. And here we have a problem:
- Google advertised something for 62p, the product was in fact not available for 62p to you. ~ sign is not an excuse, as it gives false indication product is available in your local currency, which at the end of the day, it isn't. I'm sure this breaks quite a few regulations.
- Your bank just charged you between £1.50 in the best scenario to £3.05 in the worst scenario, for essentially now not having the product originally listed for 62p on your phone. Surely there are more than enough regulations to prevent them from doing so.