Tuesday, 16 June 2015
Copyright Amendment (Online Infringement) Bill 2015; Second Reading
I am pleased to rise to speak on the Copyright Amendment (Online Infringement) Bill 2015. This is an important bill which will provide an effective mechanism for copyright owners to disrupt the supply of infringing copyright content to Australian consumers. I would like to emphasise three points in my remarks this evening: firstly, there is a growing issue with copyright infringement in digital media; secondly, there is a need to take action to address this problem; and, thirdly, I want to speak about the measures in the bill which are directed to addressing the problem.
Let me start with the growing problem of copyright infringement. The copyright framework has existed for centuries. The policy rationale is to give creatives an incentive to engage in the intellectual and creative effort to produce works—and that incentive arises because they can capture remuneration for their work. Typically, and traditionally, the copyright framework has worked on the basis that the work—be it a literary work, an artistic work or a musical work—is created and then it is disseminated on a per unit basis. That might be the number of records sold, the number of books sold or the number of movie tickets sold. Historically, there has been a physical production process which is difficult to replicate. It is not easy to replicate the printing of a book if you are not the copyright owner; it can be done but it is not the easiest thing in the world to do.
The policy framework for copyright has always involved the striking of a balance between the rights of the creators and owners of copyrighted works and the users and disseminators of those works. Striking that balance is never a simple or straightforward exercise; there are a range of considerations to weigh up. What we have seen, however, over the last 20 to 25 years is a new factor which has made the policy issues in this space even more complex, and that is the rise of digital technology as the means by which artistic, literary and creative works are disseminated. The way most people in Australia and other advanced nations—indeed, most nations—access music, movies, television or books today is almost invariably over a digital pathway.
There are a whole range of very telling statistics that can be quoted in substantiation of that proposition. Let me quote a few statistics from a compilation prepared by Teresa Sperti, an expert in digital marketing. She has drawn together some interesting statistics from a range of reputable sources. For example, the Sensis e-Business Report 2014 noted that 56 per cent of Australians now own a tablet device and 77 per cent now own a smart phone. The Deloitte Media Consumer Survey2014 noted that the internet, as a preferred source of entertainment, continues to grow at roughly 10 per cent per year. Indeed, among all Australian consumer in that survey, the percentage of people who ranked television as their preferred source of entertainment was 64 per cent and the percentage who ranked the internet as their preferred source for social or personal interests was 63 per cent; and it was expected that the crossover between the two would occur this year—that is, the internet would become the most preferred source of entertainment. So digital mediums for the dissemination of material continue to become ever more important. Another interesting statistic is that, according to the Deloitte Media Consumer Survey, some 32 per cent of Australians purchase e-books and, of those who do purchase e-books, two-thirds are reading more digital books than printed books. So there is ample evidence to support the proposition that content is being generated and disseminated using digital technology.
From the point of view of both producer and consumer, digital technology is much more efficient and rapid than the traditional technologies. But one of the consequences of digital technology is that it is much easier to copy a work than it hitherto was. Indeed, thanks to digital technology the copy can be indistinguishable in quality from the original work. The policy risk this presents is that we will end up in a world where it becomes very difficult to protect your copyright in a work. That tends to undermine the incentives of creators and also those in the business of disseminating content.
We know that we do have an issue in Australia with online copyright infringement. Indeed, Australia is a jurisdiction which has a relatively high rate of online copyright infringement, or illegal downloading. According to some recent research, some 21 per cent of all Australians over the age of 18 have engaged in illegal downloading. A statistic which should not fill us with pride is that 11.6 per cent of all illegal downloads of Game of Thrones happen in Australia. That is a percentage vastly in excess of our percentage of the global population. According to 2014 research prepared by the IP Awareness Foundation, online film and television piracy is increasing, with 29 per cent of Australians admitting to being active pirates. That same research found that one in four teenagers engages in the downloading or streaming of infringing film or television content. So we do have a growing problem with copyright infringement when it comes to digital media.
I want to turn now to why it is important that we do what we can to address this issue. There are good policy reasons why seeking to address the issue of online copyright infringement is something that government should aim to do. To start with, it is clearly important that we are seen as a jurisdiction, a market, which respects and enforces copyright. That is critical to having and maintaining a vigorous set of creative industries in Australia in fields as diverse as film, television, music, literature and so on. According to a 2012 report by PricewaterhouseCoopers, the range of Australia's industries that are subject to copyright protection employ some 900,000 people and generate economic value exceeding $90 billion, including $7 billion in exports. But of course, as I have been arguing, digitisation has tended to mean that these industries are particularly susceptible to harm from online copyright infringement. Of course a second factor is that, potentially, online copyright infringement can be harmful to consumers.
A third issue that we need to take account of, as we identify reasons why it is important to see if we can fix this issue, is that there are deficiencies in the current law of copyright, meaning that it is not a fit-for-purpose tool in some ways in allowing rights holders to efficiently enforce their rights in this modern digital world. For one thing, there are a number of foreign based websites that disseminate large amounts of infringing content to Australian internet users, and presently they are able to operate, in practical terms, without disruption, and their operators can secure a profit from facilitating the streaming and downloading by end users of infringing copies of audiovisual material. And of course the legitimate owners of that material do not share in the returns which are generated. In fact, if we are clear about what is occurring here, unlawfully accessing and then profiting from the intellectual and artistic endeavour of others is a form of theft.
Today, however, rights holders face a number of practical barriers when it comes to seeking to enforce their rights against the operators of these sites and these services. The most practical barrier of all is that the website that is facilitating this type of infringement, the operators of which are engaging in this form of intellectual property theft, is typically located in a jurisdiction where it is very difficult, if not completely impractical, to take legal proceedings. So we have a specific problem in the current regulatory and legal framework which is available to the owners of copyright to enforce their rights: that it can be very hard to take enforcement action against entities which are operating outside Australia. You would need to seek an injunction from a court, which requires lengthy and costly civil proceedings, and, because infringement is occurring on quite a large scale, it is often not viable for rights holders to enforce their rights against individual users.
It is important to acknowledge that there is a range of factors at play here, and it has been argued by a number of people in this debate that one factor has been that global rights holders tend to bring content to Australia later than it is made available in other markets and at higher prices. On that front, it is important to acknowledge that rights holders have changed some of their practices in recent years, and there are a number of constructive developments that we have seen in the last year or so. We saw Foxtel, for example, lowering its prices late last year, and we have seen new streaming services—Stan, Presto and Netflix—operating in Australia providing greater access to consumers for legitimate content at reasonable prices.
Let me turn now to the key mechanisms in this bill which are designed to facilitate copyright owners taking action to disrupt the supply of infringing copyright content to Australian consumers. Specifically, the bill will enable copyright owners to apply to the Federal Court for an order requiring a carriage service provider—typically, that is going to be an internet service provider, one of the companies through which most Australians obtain their internet connectivity; so it is an order requiring an internet service provider—to block access to what the bill calls 'online locations' where those locations infringe or facilitate the infringement of copyright and that infringement is in fact the primary purpose of those online locations. I think that, for present purposes, we can understand 'online location' as primarily meaning a website, but, nevertheless, that language has been used to take account of the rate at which technology changes and of course the mode of operation of some technologies where bits of content are spread very widely amongst multiple locations.
Provisions of the kind contained in the bill have been used in other jurisdictions, including the UK, Ireland and Singapore, and in these jurisdictions an injunction is often ordered without any opposition from the internet service provider concerned. The provisions in the bill have been drafted carefully to ensure that the new injunction power will not affect legitimate websites and services that legally provide access to copyright material. Importantly, the provision will apply on a no-fault basis against the carriage service provider—that is to say, the internet service provider. This recognises that it is not necessarily the case that carriage service providers are responsible for the infringing online locations. They are, however, best placed in a practical sense to facilitate Australian internet users being prevented from accessing those locations. So there is a clear distinction being drawn between whether internet service providers are responsible for the infringement—that is not being asserted; that is not the policy basis underlying this bill—and, on the other hand, whether internet service providers are the party best placed to facilitate the legitimate rights of copyright owners being protected against those who are engaging in infringing behaviour. Importantly, the legislation has been drafted with a view to ensuring that the power in it is only as broad as it needs to be to achieve its objectives and no broader.
There has been extensive consultation conducted on these measures, including a discussion paper released last year by the Attorney-General and the Minister for Communications, and a number of submissions—quite a number of submissions—were made in response to that discussion paper, and there are certainly measures in this bill which respond to comments made in those submissions.
Copyright protection is an essential mechanism for ensuring the viability and success of creative industries by providing an incentive for and a reward to creators. That is the underlying policy rationale for why the government is taking action here in this legislation, with a view to reducing the rate of online copyright infringement in Australia. The government does want to acknowledge the collaboration and cooperation of a range of parties, including internet service providers as well as rights holders, in developing this framework. The government looks forward to the ongoing cooperation of these stakeholders as we move to implement this framework.
I rise to speak to the Copyright Amendment (Online Infringement) Bill 2015. Labor will support this bill after closely considering it in the Senate Legal and Constitutional Affairs Committee.
The bill makes a modest but, I believe, worthwhile contribution to the suite of measures required to deal with Australia's copyright piracy problem. Copyright law is vital to fostering creativity and innovation. The national arts policy that Labor introduced while in government—Creative Australia—noted this. It expressly acknowledged:
… the role that Australian copyright plays as the primary legal framework supporting the creative economy.
Copyright law protects the rights of all those who produce original artistic or intellectual work. The very livelihoods of artists, authors, musicians, composers, writers and performers depend upon it. I am the son of a composer; I know very well the vital role of copyright laws in supporting the work of creative people.
Given how central copyright protections are to supporting creative activity of all kinds, we should be deeply concerned about the current level of online piracy. We should not mince words about this: Australia has a very serious problem with piracy. Available figures indicate that it is one of the worst in the developed world. A lot of the public debate about this topic is focused on popular foreign content, like Game of Thrones. But when Australian audiences pirate creative work it is Australian creative industries which suffer disproportionately. It is the livelihood of Australians employed in those industries which is threatened. Market research indicates that movie piracy alone costs the Australian economy $1.37 billion worth of sales, $193 million in tax revenue and 6,100 FTE jobs each year. If the arts are to thrive in Australia—if we are to be a Creative Nation—then we must have appropriate copyright protections and the measures necessary to enforce them. The current level of online piracy clearly necessitates government action.
This bill is a modest but definitely worthwhile contribution to that work. The bill implements a site-blocking process under which rights holders can seek a Federal Court injunction requiring ISPs to block overseas websites that have the primary purpose of infringing copyright or facilitating the infringement of copyright. I know that some rights holders felt that this standard—the primary purpose test—was too high. The Senate Legal and Constitutional Affairs Committee looked closely at this question and decided that the test is appropriate, and I endorse that conclusion. However, to clarify matters, the committee recommended the insertion of a legislative note into the bill, a recommendation which the government has accepted. This note explains that the primary purpose test does not have the perverse outcome that a piracy website's primary purpose is held to be, for instance, making money, even though it does so by means of copyright infringement. I hope that this amendment reassures rights holders that though the threshold test is certainly rigorous, we want this bill to be practical.
In deciding whether to make an order under this bill, the court will take account of a range of factors, including the flagrancy of the infringement or facilitation of infringement by a site, whether the site shows a disregard for copyright generally and whether the website contains a directory or index of ways to infringe copyright. On the other hand, the court will consider whether other remedies under the copyright law are available. Importantly, the court will consider the impact of a site-blocking order on any other person or class of persons, and whether to make such an order would be a proportionate response in the circumstances,
That test—the primary purpose test—and the range of factors the court is asked to consider are key. Those features of the bill make it clear that it is aimed at a very specific mischief; the power it confers is intended to be exercised very carefully and in limited circumstances. The bill is directed, essentially, at the worst of the worst. It is intended to give rights holders a remedy against a category of websites which deliberately and flagrantly flout copyright laws and operate as havens for pirate activity. It is galling that they turn a handsome profit in doing so.
A blocking mechanism is necessary because these websites are hosted overseas. Were they hosted within Australia, they would be able to be dealt with by the ordinary remedies of the copyright law. Nonetheless, ordering that access by Australian internet users to a given website be blocked is obviously a very serious step. It is appropriate that this kind of power be exercised not by executive government, but by a court. It is appropriate that in exercising that power the court takes account of the public interest, as the bill provides.
One difficulty, of course, with a site-blocking measure is that it necessarily has an impact on ISPs, even though they cannot reasonably be held responsible for the pirate activity of foreign websites accessed through their services. This bill recognises that difficulty. The bill makes clear that an ISP is not liable to pay any of the legal costs involved in applying for a site-blocking order unless they contest the application. Once this law is established and the courts have developed some expertise in making the relevant orders, I expect that most applications will be dealt with in an efficient, cooperative manner.
When the government proposed this legislation in its discussion paper on online piracy released in July last year, it indicated:
Rights holders would be required to meet any reasonable costs associated with an ISP giving effect to an order and to indemnify the ISP against any damages claimed by a third party.
The bill before the parliament, however, is silent on this point. The Senate Legal and Constitutional Affairs Committee has queried this. In its report tabled 11 June, the committee recommended that the government provide a full explanation of how costs and liability incurred by ISPs in compliance with site blocking orders will be handled. I strongly endorse that recommendation and await the government's explanation.
I have explained the intent and effect of the bill. I also want to be very clear about what this bill is not targeted at and the type of websites its terms will not capture. This bill is not, as some have sought to claim, an internet filter of any kind. It is a judicial remedy for conduct in flagrant violation of the law. This remedy is available only where the quite strict requirements of the bill are met. Make no mistake: the type of websites this bill deals with, were they hosted in Australia rather than abroad, could be ordered to be taken down under existing copyright law.
This bill does not allow rights holders to seek injunctions against virtual private network providers—or VPNs. VPNs have a range of legitimate purposes and do not meet the threshold primary purpose test in this bill. As the Minister for Communications noted in his second reading speech, many Australians use VPNs to appear as though they were in another country in order to access legitimate content which is available in that country. As the minister explained, this bill does not address that kind of conduct. Use of a VPN to access overseas content may be in breach of certain contractual arrangements but it does not breach Australian copyright law. However, there remains substantial concern in the community about this issue and, as such, the Senate Legal and Constitutional Affairs Committee wisely suggested that the government provide reassurance about this matter in the explanatory memorandum to the bill. I know the government accepts this recommendation, and I look forward to the government attending to this suggestion.
As I have said, this bill is a modest and, I believe, common-sense measure. I expect that it will make a fair dent into online infringement in Australia and that it will disrupt the operation of websites which flout the law. But this bill, and other measures which seek to deter copyright infringement, can only ever be part of the answer. We must encourage the use of legitimate content. No legislative measure will deal with piracy more effectively than the provision to the Australian market of a broad range of content in a timely and affordable manner. This is ultimately a matter for business, and not for government or this parliament, to address.
I firmly believe that Australians are, by their nature, law-abiding people. What is more, they understand the value of creative labour and want to access legitimate content and support artists. Indeed, as I said earlier, many thousands of Australians apparently go to great technological lengths in order to pay for legitimate content overseas. I am pleased by the recent progress that has been made in this regard and I hope it continues. Devising better ways of delivering content to Australian consumers is a commercial and not a policy challenge. Business must adapt to the challenges of the new digital economy. But government does have a role in setting the policy and the legal framework. As I noted earlier, Labor's Creative Australia policy affirmed 'the role that Australian copyright plays as the primary legal framework supporting the creative economy'. This does not entitle us to rest on our laurels. Copyright law supports creativity and innovation in our culture, in our society and in our economy. If we allow our copyright law to become outdated, obsolete, we cannot expect to thrive in the new digital economy.
Australia's current copyright law was conceptualised and drafted before the first email was ever sent—when the modern internet was scarcely imaginable. It was enacted fully three decades before the invention of Google in an era when a visit to the library necessitated rifling through a card catalogue. The law is, needless to say, in need of a thorough overhaul. It was for this reason that Labor tasked the Australian Law Reform Commission with investigating how the copyright law could be updated for the needs of the digital age. The commission provided its report to the then newly-minted Attorney-General, Senator Brandis, in November 2013.
Early in February 2014, Senator Brandis undertook to pursue a root and branch reform of the copyright law in response to that report. The Copyright Act, Senator Brandis said quite rightly, is, 'overly long, unnecessarily complex, often comically outdated and all too often, in its administration, pointlessly bureaucratic.' Senator Brandis promised that he would conduct 'a thorough and exhaustive exercise in law reform' to remedy this and yet Senator Brandis has produced nothing. More than 18 months after receiving it, the government is yet to respond to the Australian Law Reform Commission's report. It has not even begun to grapple with the very serious body of work the commission produced. Farcically, when Senator Brandis is asked time and again what his government will do on copyright reform, he tells the parliament that the government is still considering the commission's report.
Senator Brandis did, in his discussion paper of last July, endorse a proposed extension of the safe harbour scheme, an idea worth serious consideration, but even this one mooted reform has apparently fallen by the wayside. The government has not pursued the proposal—though I note that the Senate committee considers it an option worthy of further consideration. This is simply not good enough from the government. Australia cannot hope to support our creative industries nor to encourage new digital practices in business, education and academia if our copyright law is allowed to lapse into obsolescence.
Mark Twain, at the turn of the last century, said, 'Only one thing is impossible for God: to find any sense in any copyright law on the planet.' I do not share his pessimism. Given some leadership from the government, this parliament is without doubt capable of passing reasonable, clear and up-to-date copyright laws. If the government does not act, however, if it does allow our copyright laws to stagnate, we might find them becoming not just nonsensical in the new digital era, but worse—irrelevant. Copyright is much too important for us to allow that to happen.
I move the second reading amendment circulated in my name, which draws attention to the government's failure to respond to the recommendations of the Australian Law Reform Commission's report on copyright in the digital economy and as well, regrettably, the government's failure to fully respond to the recommendations of the House Standing Committee on Infrastructure and Communication's inquiry into IT pricing directed at encouraging legitimate content downloads. The second reading amendment also calls on the government to do so—that is, to fully respond to both those sets of recommendations by 17 December 2015. I commend the bill to the House.
It is good to speak on this very important area of copyright law and copyright reform. I think it is important at the outset to reflect on why this legislation is necessary. The reason that it is necessary is because of changes in technology. The growth of the internet has been massively beneficial to society in so many ways—education, health care, entertainment, news, you name it. But, as in all things, there has been a downside. One of the difficulties that has arisen in the internet age is it has made it very relatively simple to commit acts of piracy. There was probably always there a human capacity to engage in piracy. It is just that online technology makes it so much easier. As a consequence of that, the amount of piracy has grown quite substantially to the point where it is a very serious threat to legitimate businesses.
The other issue with the internet and distribution online is not only is it relatively simple for consumers to engage in acts of piracy but it is also relatively difficult to track down the source of those acts of piracy in the geographical sense. It is not like the old days where a pirate would be perhaps clutching a pirated VHS tape at the local store. This is about content coming from all around the world and from many different locations. As a consequence, it has been a very difficult problem for government to address and to seek to minimise the impact of piracy.
There are two categories of business that are negatively affected by piracy. Both of those categories of business deserve the right to be protected against unlawful piracy. The first is producers. We hear a lot about the Australian production industry. We have a proud tradition in this nation of punching above our weight in video production, in film, in television and so on. The capacity for people to make use of that programming without paying for it obviously has a significant negative impact on those local producers and protecting their rights is important.
There is also another category of businesses that do not actually produce the content but buy the right to distribute it. Their rights are equally important. That content is not always produced in Australia but the rights to distribute it are obtained in Australia. It is very important that government acts sensibly to minimise the piracy wherever it can.
It is worth thinking about why this space has changed so dramatically. If you think through the different modes of video distribution and how they have changed in recent years, it provides a pretty clear insight into why reform in this area has been needed. Focusing on video distribution, there is a wide range of traditional formats and some new ones. Perhaps the oldest of all is theatrical release. In the old world, the first distribution of a film would be in a theatre. There was no capacity in a practical sense for that film to be accessed or distributed prior to the theatrical release and, consequently, there was not a major problem. Now of course we have a situation where people can attend a theatrical releases in other countries, they can make a copy of that movie and then they can distribute it online on the same day. That may be months ahead of when the theatrical release is due to be distributed in Australia.
The same applies to free-to air-television. I am sure you will fondly remember the days of when the television programs would be seen in Australia. We would all wait for the Australian release of the program often some months after it was broadcast in the US and other countries. There was no suggestion that anyone would be able to access that program beforehand. But now you can because as soon as it is released in other countries, particularly the United States, those online copies are often available.
The same applies to videos and DVDs. DVDs were copied and continue to be copied. There continues to be copyright infringement in physical formats but, again, the complexity of actually going and getting a copied DVD, of selling it and distributing is a much higher order than it is of simply putting something online. And, as a consequence, online distribution is so much greater.
We now have an emerging set of legitimate online distributers of video. Over the past seven or eight years, as internet speeds have been sufficient to distribute video online, the industry has been principally based around what is called 'ad-supported distribution'. Also known as 'catch-up TV', it is where a program, after distribution or broadcast, is shown online and advertising is sold against that. The problem for content owners is that once a program has been broadcast on free-to-air television there are often free copies being distributed online without ads in them. That is a very compelling proposition for consumers—watch something without ads, or watch it with ads. Unfortunately, many consumers are choosing to watch those pirated copies. The same applies to transaction video on demand and increasingly subscription video on demand, where we are seeing the rise of services like Stan, Netflix and others. What copyright owners deserve is for fair rules of play to be imposed across the system so that people's intellectual property is protected.
In a moment I will come to the specific provisions of this bill, which will go a long way to solving this significant problem, but I also want to touch on another issue in the area of online copyright. It concerns the use of the facilitation of copyright infringement through the distribution of internet protocol boxes, or IP boxes, as they are known. This is an important issue for a number of pay TV broadcasters, some of which are very important in my community, in the Chinese language community, in the Arabic-speaking community and in a range of other communities as well.
We face a situation today where in some retail stores in Sydney it is possible to buy an IP box which is effectively sold on the promise that it will enable you to access a range of copyright-infringing material. You buy the box, and it is configured in such a way that it accesses content which is legitimately pay TV content but which is being sourced unlawfully from another jurisdiction and provided at no cost to the consumer. Those retailers and distributors are effectively facilitating the breach of copyright.
The provisions in the bill that we are discussing today go right back to the source of the infringing material, right back to those unlawful channels, unlawful sites and so on. It is also important to reflect on entities that are contributing to online infringement through the sale of IP boxes which are specifically designed to encourage copyright infringement. Companies like TVB, World Media and others face this issue every day, and it is a very important one.
This legislation is going to be of enormous help in reducing the incidence of copyright infringement, and it takes a very practical approach. It is a very complex area—there are people all around the world involved in copyright infringement. It is incumbent on legislators to be practical and to think about how legislation such as this will work in the real world. This will be effective, because this enables an entity who feels that its copyright has been breached to seek an order requiring an ISP to effectively block access to that infringing material. But most of the time that infringing material will be sourced from overseas.
In a practical sense, it is very difficult for Australian law to go after a copyright-infringing service that might be based in Kazakhstan—or in any part of the world, for that matter. But what we can do is require ISPs who are based in Australia and subject to our laws to act to minimise the likelihood of copyright-infringing activities occurring. That basically requires the ISPs to block access to sites or other online locations that are engaging in infringing activity. The ISPs themselves have done nothing wrong, and importantly this legislation makes that clear. There is no suggestion that the ISPs themselves are engaged in copyright-infringing material. But going to the source and blocking the relevant service will go a long way to reducing the incidence of copyright infringement. So it is a very practical solution.
It is also important that the legislation provides that, for an order to be issued by the court requiring an ISP to take down material, the primary purpose of the online location must be copyright infringement. What that means is that if a site is engaged in legitimate activity, such as Netflix, based in the US, the fact that an individual in Australia might be accessing that site in a manner which infringes copyright does not mean in and of itself that Netflix is engaged in activity which should be blocked, and that is a really important distinction.
This legislation basically goes after entities whose business model is to infringe copyright. It is extremely important that this occurs. Just as in any other industry people have a right to be protected against theft of their physical or intellectual property, so should people involved in our creative industries, who employ so many Australians and do so much good work.
The good news is that the injunction powers that are proposed by this law have been effective in the UK, in Ireland, in Singapore and in other jurisdictions, and again the capacity for the copyright owner to simply seek for the offending site to be blocked by the ISP is the most practical possible way of addressing this problem. I concur with others in this debate in saying that I think the way that this will play out is that in the early days you will probably see a number of court actions initiated. You will see some court orders issued for take-down notices for infringing material. But then what will happen, logically, over time, is that ISPs and content providers will work together in a sensible way. No doubt they will circumvent much of that court formality and work together in a constructive fashion to take down offending material, and that is as it should be.
These are very sensible steps. They are practical. They are not going to catch lawful activities. Importantly, they make it clear that ISPs themselves are not engaged in unlawful activity, but they make use of the technical capacity of ISPs to go directly to the source of the problem and seek to solve it. This is a complex area. This is an area of law that will continue to evolve, but these are important provisions, and I strongly commend them to the House.
Piracy is a breach of copyright. It is the unauthorised copying, distribution or use of copyright material, and Australians do it more than almost anyone in the world. Game of Thrones is the most pirated television show in history, and last year Australians illegally downloaded it more than any other country in the world. According to data gathered by file-sharing site monitor TorrentFreak, in 2014 we accounted for 11.6 per cent of illegal downloads of Game of Thrones. In 2013, we also topped the list for pirating the Breaking Bad finale. Eighteen per cent of illegal downloads of that show were right here in Australia. Why is this happening? There are lots of reasons, but the main reason is that, if Australians cannot get access to the content that they want to watch or listen to and they cannot get access to it cheaply and quickly, they will find another way, either by using a VPN to access overseas content or by peer-to-peer file sharing or accessing overseas websites like The Pirate Bay.
The Copyright Amendment (Online Infringement) Bill 2015 establishes a legal process to block access to websites like this. Under this legislation, copyright owners will be able to apply to the Federal Court, requiring internet service providers to block access to overseas websites, like The Pirate Bay, which have the primary purpose of infringing copyright or facilitating the infringement of copyright. This is not unique. It is not new. Thirty-nine countries around the world have legislation that is similar to this.
This bill has been subject to an inquiry by the Senate Legal and Constitutional Affairs Legislation Committee. It received 49 submissions, and most of those submissions were broadly supportive of the bill, but some raise concerns about its reach as well as the costs associated with it and its effectiveness.
In relation to reach, there are concerns that were raised in submissions—and are reflected in the committee's report—about whether VPNs might be caught up by this scheme. The minister has raised the same concerns himself. I am glad that the committee recommended changes to the explanatory memorandum to clarify the status of VPNs, but they do not appear in the amendments to the explanatory memorandum that the government has circulated in relation to this bill. I ask the government to make a change to the explanatory memorandum to ensure that this occurs and to ensure that the explanatory memorandum is amended to reflect the concerns raised by the committee.
ISPs have also raised concerns about costs and indemnity issues. Once again, the committee recommended changes here to the explanatory memorandum, and once again I do not think the government's changes to the explanatory memorandum sufficiently address the concerns of ISPs or the committee. I also do not think they reflect the position set out in the government's own discussion paper, which said:
Rights holders would be required to meet any reasonable costs …
So I ask the minister to have another look at this.
The amendments that the government has circulated also do not include the two-year review of this legislation that the committee recommended. So, when the minister speaks in reply later in this debate, I ask him to make a commitment to do this as well.
Piracy is illegal. If this legislation helps to reduce piracy then that is a good thing. But there is still good reason to be sceptical about how effective it might be. There is lots of evidence that site-blocking legislation can have an impact, but sometimes that impact is temporary. Sites that have been blocked often disappear for a while and then reappear down the track under a different domain name or web address. The Minister for Communications has made this point himself. On 10 December 2014, he said:
We have seen evidence overseas that that is what happens from time to time. Last month, in Sweden, The Pirate Bay's official domain name was seized by the court, but, as The Independent newspaper reported on 19 May this year, the people behind The Pirate Bay have already said that the site is likely to be able to get back up and running at an alternative address.
What this shows is that, to be effective in combating piracy, you have to do a lot more than just pass laws like this. A lot of the responsibility for that rests with industry. A survey conducted by iview for Choice last year found that 50 per cent of people downloading illegal content said that their main reason for pirating was price, and 41 per cent said it was that they wanted specific content sooner than available in Australia.
The take-up of services like Spotify and Netflix demonstrates that when people can get access to content cheaply and easily, they take it up. Last year, research conducted by Spotify said that there was a 20 per cent decline in music piracy over a 12-month period. Netflix has had a similar impact. In April, Netflix's chief content officer Ted Sarandos said:
The real great news is, in the piracy capitals of the world, Netflix is winning. We're pushing down piracy in those markets by getting the access.
Netflix is expected to sign up one million Australian customers by the end of the year. About six million Australians have used Spotify.
The take-up of services like Netflix, Spotify, Stan, Presto, iTunes and Pandora show that Australians want content and they are prepared to pay for it if it is cheap, quick and easy to get. All of these services are great examples of industry responding to the needs and the demands of modern day consumers. But there is still more to do. On that point, it is a mistake to assume that is just teenagers illegally downloading shows like Game of Thrones or Breaking Bad. People of all ages do it.
Research commissioned by the Australasian Performing Rights Association in 2013 found that 44 per cent of people aged 18 to 30 engage in piracy, 25 per cent of people aged 30 to 49 do it and so do 11 per cent of Australians aged 50 to 69.
Yes, it's true. Interestingly, the research also indicates that the higher your income, the more likely you are to illegally download TV shows, music and movies. According to the APRA research, a household earning less than $40,000 a year is less likely to engage in illegal downloading than a household earning more than $100,000 a year.
In his second reading speech, the Minister for Communications also mentioned an education notice scheme that is being developed by ISPs and copyright holders that will warn people who have allegedly pirated copyright material and give them information about legitimate alternatives. This is now being developed into a code of practice and is currently being considered by ACMA. The good news is that it does not look as bad as some people feared it would.
The government discussion paper that was released in July last year canvassed the US copyright alert system, which involved ISPs slowing down the internet speed of their customers or cutting off their access to the internet altogether. A similar system operates in South Korea. There have been people in this government and in industry who have been keen for Australia to adopt this approach. I am glad that we are not.
The bad news is that it is still unclear who will pay for the cost of operating this scheme, how much rights' holders will pay to operate it, how much ISPs will pay and how much this will add to the internet bills of Australians who do not illegally download.
I also want to draw the House's attention to the failure of this government to do anything to address the recommendations of this report, Copyright and the digital economy: final report by the Australian Law Reform Commission, dated November 2013 and released by the Attorney-General, I think, in February 2014—almost a year and half ago. It is a very important report. It includes, all up, 30 recommendations. The bill that we are debating here tonight is an amendment to the Copyright Act, and it does not respond to any of the recommendations in this report. The key recommendation in the ALRC report is not this—it is not about site blocking; it is the creation of a fair use exemption. The Law Reform Commission argues that this would:
… make Australia a more attractive market for technology investment and innovation.
When I was in Silicon Valley last year, I heard much the same thing from my conversations with people at Google, Amazon and Yahoo. All of them told me that laws like this, fair use exemptions to copyright legislation, helped to facilitate the development of things like search engines and cloud computing.
What are we doing to implement these reforms here? Nothing. The report has been gathering dust now for almost 18 months. And the only change that this government has proposed to copyright law is this legislation that we are debating tonight.
It is the same with this report, At what cost? IT pricing and the Australia tax, a report of the House of Representatives Standing Committee on Infrastructure and Communications, dated July 2013. This report made another problem clear—that is, that we pay more for IT products than people do in many other countries around the world. Often, we pay 50 to 100 per cent more that people pay overseas. That includes everything from music to games, software and hardware. Incredibly, it is cheaper to buy a song from an Australian artist on the US iTunes store than the Australian equivalent.
The report makes a lot of recommendations and, once again, the government has done nothing about them. That is why the opposition are moving a second reading amendment, calling on the government to respond to both of these reports by 17 September. I encourage the government to support this proposal. If the government does not support this then it will show very clearly to the Australian people that the government is not serious about reform in this area.
We do need to reduce piracy. We do need to protect copyright. If this legislation helps to reduce piracy then that is a good thing. But we need to be careful not to overestimate how effective this legislation might be. When I was a kid, you learnt about piracy at the start of every video that you got from the video store. It was the bit that you could not fast-forward through. It is a very different world today.
The internet allows us to get almost anything we want at the click of a button. When you have to wait longer than people in other countries or pay more to watch what you want to watch or listen to your favourite music or play your favourite game, people understandably get angry and frustrated, and they look for another way to get what they want. Legislation like this will not stop that; it will not stop that in its entirety. Content also has to be cheap, quick and easy to get. And that is a job for business not for this parliament.
Australia possesses a valuable creative sector. In my electorate of Forrest, there are a number of creative industries and organisations. One of those is the Vue Group. I was just at the ASTRA event talking to those who might be interested in what the Vue Group are doing. The Vue Group is a creative studio based in Bunbury in my electorate of Forrest in the south-west of Western Australia. Recently it was a finalist in the 2014 WA Industry and Export Awards in the categories of small business export, creative industries export and regional exporter. The development of this high-tech industry in Bunbury will, over time, employ more than 200 people locally for their biggest projects. It is set to become WA's biggest film company looking to access the demand for animation and CGI films in China. This is exactly the sort of business which could be impacted by the issues we are discussing in this bill, particularly online copyright infringement. The creative sector is certainly in the firing line of this one.
As with the Vue Group, we know that in Australia we certainly have a very serious problem, one of the worst in the developed world. Looking at the wonderful work the Vue Group do, in our small part of the world they already have contracts worth $160 million to coproduce several animated features with the Chinese staff at Shanghai Hippo Animation and there are plans to expand this, assuming a range of other opportunities.
Another creative industry in my part of the world is a group called Sonic Lolly, founded in 2010. It is a music and sound creation, production, publishing and strategy type of company. It operates out of world-class recording facilities in, of all places, Margaret River in Western Australia. They have an international target market, as well as the local, regional and national industries. As we know, there is a great demand for quality recording, for production, from music business strategy and for artist development, all of the things that are happening in a similar way through Sonic Lolly and other businesses.
The South West Development Commission looked at the creative industries in the south-west and a report was done by SGS Economics and Planning, looking at the 2011 census. There were 1,095 employees working in the creative economy in the south-west at that time and the turnover was around $306 million with a gross regional product of $148 million and exports of $70 million. That is just in my part of the world and it gives you some idea of the creative industries in Australia that are most affected by copyright infringement.
Additional messages in the report tell us that this is going to be an emerging industry. The south-west region hosts more than one tenth of the state-wide specialists employed in film, in television and in radio and seven per cent of the state-wide employment in publishing. This area is certainly impacted by the issue of copyright infringement. We have so many high-performing creative industries—film, television, radio, publishing, architecture, design, visual arts, music and performing arts. Growth is at 3.6 per cent and each creative sector worker in the south-west basically adds more value—$136,000 a year—than his or her counterpart in other locations, including Perth, and even in other world renowned international creative locations. They are doing a great job.
This particular sector will be a focus of the regional economy in the future. That is why this type of legislation is particularly important. Yes, it may not be all that needs doing in this place over time but this bill introduces a key reform that will reduce online copyright infringement because of the specific concerns raised by copyright owners. I am not surprised when you look at the reasons and the figures behind that. Copyright protection provides an essential mechanism for ensuring the viability and the success of creative industries, those I spoke about at the beginning of my speech, just a snapshot of what is currently happening and will happen in the future not just in my part of Australia but right around Australia. I am particularly proud of what those businesses do and the emerging sector that is the creative sector.
We need to keep incentivising and rewarding such creators like the people in south-west Western Australia. Where online copyright infringement happens on a large scale, copyright owners need an efficient mechanism to disrupt the business models of online locations operated outside Australia which distribute infringing copyright material to Australian consumers. There are significant difficulties in taking direct enforcement action against those types of entities. Online copyright infringement poses a significant threat to incentives and rewards to the creative sector in Australia due to the ease by which copyright material can be copied, can be shared—and it is almost viral—through digital means and without any authorisation. When you consider that Australia's copyright industries employ 900,000 people, at an economic value of more than $90 billion and $7 billion in exports around this country—and, of course, digitisation means that they are particularly susceptible to online copyright infringement—you realise that this really impacts directly on the Australian economy. That is why we have taken this so seriously.
But it can hurt consumers as well. Consumers accessing material unlawfully are certainly not covered by consumer protection laws and may be exposing themselves to the risk of fraud and other forms of cybercrime—without a question. As you know, Mr Deputy Speaker, I do a lot of work in this space. I do presentations in the community for school groups, parents, businesses and broader community groups. I see the harm that they come to in this space all of the time. The absolute focus of what I do is on children and the education of children around what they do online. Both the Attorney-General and the Minister for Communications noted that children in this area of online piracy and online copyright may be exposed to material that is not age appropriate. I can certainly say that that is exactly what is happening, whether in my community or in others around Australia. Children are, through this medium, being exposed to material that is certainly not appropriate for their age, facilitated by online infringement.
We cannot expect that any single measure is likely to eliminate online copyright infringement, but we have to take one step at a time, and this legislation is an important step. As I said, there is no easy solution and a range of measures are required to reduce piracy. We want for people to be able to continue to enjoy content in the digital environment, but rights holders need to know that their content can be accessed easily and at a reasonable price and that internet service providers will take reasonable steps to ensure that their systems are not used to infringe copyright. We need consumers who are prepared to do the right thing and access that content lawfully so that our creative industries can get the benefit of what they produce—of their imagination, of their investment, of their creativity and, often, their heart and soul, which they put into the work that they do. We need a legal framework that facilitates that industry cooperation so that we have flexible but effective measures to help combat online piracy.
Overseas, we have seen other countries try to address this. This is not a simple issue. The US has a Center for Copyright Information. It is a industry body with a voluntary industry agreement called the Copyright Alert System. The UK has a similar approach through Creative Content UK and New Zealand has a statutory graduated response scheme. It just shows that it is such a complex issue.
There are 3.4 billion people plus in the world using the internet. At least 1.3 billion people use Facebook. There are tens of thousands of websites, many with absolutely no encryption and no protection of any sort. That is the environment people are in. The 3.4 billion people using the internet often have no idea what they are exposing themselves or their systems to when they engage in this space.
As to some of the reasons that we really do need to be concerned about online copyright infringement, we have consumers accessing material unlawfully, as I said. They are not covered by consumer protection laws. I am sure this is something that has not really occurred to them at all. I look at the issue of online safety and the amount of time that people are spending online, and they have an increased exposure to this problem, certainly when it comes to online piracy. If you talk to a child about the time they spend online, frequently they do so with absolutely no barriers to what they can access or where. It might be from 20 minutes to a couple of hours and on weekends unlimited, so they have access to everything online. The issue that really affects me is the fact that children have access to information and to sites that are not age appropriate.
The Senate Legal and Constitutional Affairs Legislation Committee reported and made recommendations. Three amendments, one to the bill and two to the explanatory memorandum, will implement the recommendations of the committee and ensure that the bill better achieves its objectives by providing a framework—this is the important part—that is workable, which it needs to be. It needs to be effective and flexible and very easy to understand. There is only one proposed amendment to the bill. This amendment provides that, in considering whether to grant an injunction, the Federal Court may take into account the list of specified matters rather than being required to take these matters into account, which enables the Federal Court to exercise discretion as to what matters to take into account as well as the appropriate weight to place on these matters. Again, there needs to be a practical approach, consistent with that normally taken by a court in assessing whether to grant an injunction. There are two proposed amendments to the explanatory memorandum. The first relates to appropriate orders that the Federal Court may make in granting the injunction, consistent with the Federal Court of Australia Act 1976, and a supplementary explanatory memorandum providing a further example that the court could order that parties set up a landing page where subscribers will be diverted to if they try to access a disabled online location. Such a direction would have merit since subscribers will know what is going on without needing to contact their CSP to ask questions. The second amendment to the explanatory memorandum is to provide further clarification on costs and liabilities of CSPs in carrying out an order. This is the position under case law, and the bill is certainly not intended to change that.
I will go back to where I started. There are so many creative industries in Australia with a great future. We need to make sure that they get the benefit of the work they do, of their creative capacity and of their business model. This is one part of that. I commend the bill to the House.
I am pleased to have the opportunity to speak on the Copyright Amendment (Online Infringement) Bill 2015 and to support the amendment circulated by the Shadow Attorney-General. In particular, I think that the substance of the amendment that has been moved goes to the heart of many of the submissions that were made to the Senate inquiry into the bill and addresses factors that contribute to behaviour and breaches of copyright in the first place that are useful to discuss in this context. Make no mistake, this is a vexed area. It is vexed in terms of not only a legal perspective but also a policy perspective, there is no question about that.
In making some observations on the bill, I want to touch on its rationale, on Labor's approach, on the importance of protecting consumers, on some concerns that my constituents have raised with me and on some of the misconstruing surrounding this bill. I also want to redress what I might describe as push factors for online piracy in the first place. Last night when I was giving some comments on the report by the House of Representatives Standing Committee on Infrastructure and Communications into section 313 of the Telecommunications Act, I foreshadowed that one thing that often seems to be missing from debates around these areas of site blocking and copyright is a focus on consumers. I think it is really important to bring it back precisely to that point.
One article that has stuck in my mind for a couple of years was by Zack Whittaker from 10 January 2011. I believe it has been published on ZDNet since. It is headed 'Why young people pirate (pssst: it's not just about money)'. It asks very valid questions that go to the whole issue of why people and, in particular, young people do pirate. This was written from a UK perspective, but I think the principles remain the same. This article asked the questions: is it just a lack of available regional content between the US and Europe, or is it just all about the money? He makes some statements that I think are valid more than four years later in the context of this debate. It would be a lie to say that money was not a significant factor for young people and students alike. But to collate and understand why young people pirate boils down to one easy, summarising statement: the legal options are not as readily available, simple enough or consistent enough to access. It really is as simple as that.
It is important to look at this in the context of Australia today. One aspect that is useful in this regard is a survey that was published by Choice in December last year. Their piracy survey shows that most pirates are actually willing to pay for content. It notes that one-third of Australians have illegally accessed online content. Some of the key survey findings are that 50 per cent of pirates said that their main reason for pirating was price and 41 per cent said it was because they wanted specific content sooner than available in Australia. For a staggering 91 per cent of those pirating, their rationale or main reason is either price or availability. I am not proposing, and I think it would be absurd to propose, that the law should and can address these areas. But the fact that the Choice survey shows most consumers—55 per cent—try to use legal sources first before searching out pirated copies of content does indicate that there is an issue in the market here.
On that point, I believe that it is important for the government to pick up the recommendations made in the report from July 2013 At what cost? IT pricing and the Australia tax, which had a very sensible list of recommendations that are worth exploring. I will just go to one of them, recommendation No. 6. It does not propose a legislative change, but it does propose that the government investigate options to educate Australian consumers and businesses on matters such as the extent to which they may circumvent geoblocking mechanisms in order to access cheaper legitimate goods, the tools and techniques which they may use to do so and the way in which their rights under the Australian Consumer Law may be affected should they choose to do so.
I want to consider some of the submissions that were made to the Senate committee. There were 49 submissions in all. When you look at the list of submitters, these are all very knowledgeable groups in their own areas. I want to take a sample because, although some of these are contrary to one another, they do illustrate the point that I have been making that access to content in an affordable and timely manner is a key issue in circumventing breaches. Like many members, I received a large number of emails which were accessed through the Choice website. I want to acknowledge the constituents who went to the trouble of looking this up and sending me an email on this, often with additional comments. I have here a request to vote against this bill, but there is also a statement: 'If you won't vote against the bill, then I ask you to make sure that it won't accidentally captured legitimate websites including VPNs.'
It urges me to have a look at the Choice submission that was made to the inquiry, and I want those constituents to know that I have duly done that. It was very useful because, as pointed out in the introduction to its submission, Choice believes that the bill is unlikely to reduce access to sites facilitating online infringement and even less likely to reduce the rates of online infringement. Even if you disagree with that point, they then make a point that I think is quite valid, and I go back to the 2011 article that I previously quoted: Choice's research has consistently shown that consumers in Australia pay more for identical digital products than consumers in comparable markets such as the USA or United Kingdom. Providing Australians with better access to digital content at a comparatively reasonable price will give consumers a greater incentive and opportunity to access content legitimately. Indeed, it goes to the very issue of the IT pricing inquiry that I mentioned. We think it is unfortunate that this approach—that is, this bill—favours a heavy-handed legislative approach ahead of market based reforms such as those recommended by the House of Representatives inquiry into IT pricing and also the recent final report of the federal government's competition policy review. Again, I make the point that timely and affordable content is paramount in this case.
A different submission is that of Screen Producers Australia. I acknowledge Screen Producers Australia, who have been hosting a number of events in Parliament House over the past few days. As is the case with the member for Melbourne Ports and the member for Moreton, the screen is one of my great loves. I was previously the chair of Screen New South Wales. It was a position not only that I enjoyed immensely but that taught me a great deal about the way our creative industries support people in my electorate—an electorate you would not normally consider to be one that would benefit from these industries—everything from the catering to the logistics and to the minds of the people creating content that certainly should be protected. So, I want to acknowledge Screen Producers Australia. Their submission notes:
As representatives of intellectual property creators, Screen Producers Australia strongly supports initiatives that will reduce the incidence of online copyright infringement and we offer in principle support to the proposed amendments in this Bill.
Screen Producers Australia believes that these amendments, along with a Copyright Notice Scheme, will form an important part of a holistic strategy, one that includes public education, promotion of legal alternatives and a pathway to stronger enforcement. It is the view of many rights holder groups that similar site blocking measures have been adopted overseas and have had a positive impact.
Indeed, I take particular note of their point about it being a holistic strategy. Not only legislative means such as this but also other means of ensuring that Australians have access to timely and affordable content will go a long way towards that.
Screen Producers Australia refers some of its substantive comments to the Australian Copyright Council, a very reputable organisation founded in 1968. Whilst they say that they support the government's strategy to address online copyright infringement, they wanted to raise a number of operational features of the bill. One of them that stands out is the definition of online location. They point out that infringing websites can indeed pop up at different domain names, and some of the other submissions I have looked at raised this very issue as well. They point out that the term 'online location' may be broad enough for an injunction to cover replicas of the same infringing website that pop up at different domains. And I think they make a very valid point, that settling this is crucial for the legislation to be effective. So, how this is administered in practice will certainly be extremely important.
A submission like that of Electronic Frontier Foundation takes an intensely different view. But, again, they do point out the importance of giving consumers timely and comparatively affordable access to content:
EFF believes that censoring content from the Internet through blocking or filtering is never the best approach to take in managing illegal behaviour online, and that it is always much better to address such behaviour at its source.
I believe that here they are going to the issue of behaviour: why are people pirating? It goes back to those very issues I mentioned.
In the time left to me I want to point out that the government has not yet responded to the ALRC report. In July last year the Attorney-General and the Minister for Communications released a discussion paper about online copyright infringement, which included a number of proposals. The bill we are debating takes up the second proposal, which looks at introducing mechanisms for blocking infringing sites. My understanding from the research I have seen is that Australia, unfortunately, has a high level of piracy by international standards, and it does have an economic impact, it does have an impact on jobs and it does have an impact on the sector. And the effects flow on to many other areas of the sector. We on this side of the House support reasonable measures to discourage piracy. We believe action is needed to reduce current levels of online piracy and that the enforcement of copyright law is vital to our creative industries.
So, we do support this bill, which, as the shadow Attorney-General has pointed out, is modest. It is a common-sense measure. It is intended to disrupt foreign websites operating as havens for piracy and to discourage copyright infringement by Australian consumers. To quote the shadow minister for communications and the shadow Attorney-General last year:
It is clear that action is needed both to deter piracy, and to encourage access to legitimate content.
We made it clear that there are concerns regarding the effectiveness of site blocking when dealing with online piracy, and we noted that pirated content is likely to reappear as quickly as it can be taken down.
As I have said, this bill will certainly not completely solve the problem of piracy in Australia, but it is appropriate to take action against websites that flagrantly and intentionally flout the copyright law. This bill is directed at foreign websites whose primary purpose is to infringe copyright or facilitate the infringement of copyright. It is hoped that disrupting this kind of website will discourage at least some copyright infringement in Australia.
I note that the shadow Attorney-General in his remarks this evening made comments on what the bill does not do, and I think it is important to highlight where this bill draws the line. This bill does not provide for a sort of internet filter. It provides a judicial remedy on a case-by-case basis for conduct that flouts existing Australian law. The requirements of the bill are strict, and we can expect Federal Court judges to exercise the site-blocking power cautiously and with restraint. And I am conscious, as I indicated, because of a number of constituents who contacted me—and according to that Choice website over 5,000 such emails were sent to various members of parliament around Australia—that some members of the community and my own constituency are concerned that the bill might allow the blocking of virtual private networks, or VPNs. We have made sure that this is not the case. Our senators on the Senate committee investigated this matter and are satisfied that the bill's terms would not extend to blocking VPNusage. However, we have asked the government—and I think it is a reasonable request and my understanding from the Attorney-General is that it has been agreed to—to put this matter beyond doubt by amending the explanatory memorandum to clarify this.
I think it is important that, while we do have this bill, we need to ensure that timely and comparatively affordable content is made available to all Australians.
I, too, rise to speak on the Copyright Amendment (Online Infringement) Bill 2015. I have big shoes to fill, after that great speech from the member for Greenway. The purpose of this bill is to address the ever-increasing problem of online piracy in Australia. As mentioned by the member for Greenway, by international standards Australia's level of online piracy is, sadly, very high. In fact, according to the Choice survey, about one in three Australians has accessed data. If I think of one in three people in my electorate, say, my wife, me and let's say any other person in the chamber from Moreton, one of us three will have accessed data and I know it is not my wife or me.
But, obviously, one in three Australians is doing that, according to the Choice survey. I do not know whether that is because of our larrikin spirit or our convict links or, as the member for Greenway touched on, the fact that Australians have been shafted for such a long time when it comes to price and the timing of the shows that they want to watch. Nevertheless, irrespective of those reasons, piracy is a real threat to our creative industries. It is important that we look after our authors, directors and musicians by ensuring that they receive a fair return for their artistic endeavours. I note that this matter has been canvassed before by the member for Chifley in a previous inquiry. He raised those concerns about price and timing. I will not canvass that in this speech. Instead, I will just address the copyright legislation that is before the chamber.
However, as an author and someone who struggles with creative endeavours, I think it is important that we do look after these industries. These industries are still reeling, particularly in terms of artistic endeavours, by the recent and bizarre decision by the Attorney-General on budget night to strip $105 million from the independent, well-respected historically creative and lean Australia Council and move it into his office. I will address that matter in other forums, but I do want to focus particularly on the protection of artistic endeavours contained in this copyright amendment bill.
Obviously, piracy damages a vulnerable industry and impacts on precious Australian jobs. I have been involved in that creative process outside of being a politician both as a musician and as an author—a very ordinary musician and an author with limited financial success. Nevertheless, back in my teachers college days, I was in a band that people can track down. I had a fantastic songwriter, John Carozza, who went on to become an artist. In fact, he has a show commencing this Friday at Gallery 61, Musk Avenue, Kelvin Grove. I hope to get along to that.
From 6 pm to 8 pm—thank you, Member for Melbourne Ports. I know you will go along because of your support for artistic endeavours. There is a great artist, a musician, now a painter, finding it hard to extract an income from his artistic endeavours. As an author I know how difficult that is as well. I understand the difficulties of emerging artists in particular in trying to develop a sustainable income. These are very difficult industries, whether it be cinema, writing, music or whatever, to get a foothold in. And in this modern world of illegal downloading it is even harder to make a buck. It would be a sad day indeed if the only way for an up-and-coming rock star—U2, Midnight Oil or the like—to make a dollar would be to actually busk and perform live rather than sell their product not just to Australia but to the world, something that Australian musicians, cinematographers and theatre producers have done so well.
The bill will not solve this difficult problem but it will be a small common-sense measure that will disrupt the foreign websites which are acting as havens for piracy and may discourage those one in three Australian consumers from participating in this practice. It is a practice that sabotages the artistic endeavours of the very artists we admire and support. Obviously, we do not download the material from artists whom we do not admire, respect and support. So it is a conundrum. As the member for Greenway touched on, if people had the opportunity, they would be prepared to pay something that is reasonable. But we come down to those problems of price and timing.
I stress up-front for those people who are interested and I am talking particularly to one of my constituents Nerdy Nigel—that is his Twitter name—that this bill does not provide an internet filter of any kind. It provides—and this is important in a week where we are celebrating the 800th Anniversary of the Magna Carta—a judicial remedy. A judge will decide whether the conduct involved breaches our Australian law and each case will be decided on its merits—something that all Australians would obviously be supportive of. This bill will provide for the owner of a copyright to apply for an injunction to require a carriage service provider to take reasonable steps to disable access to an online location.
An injunction, as any lawyer would know, is a serious remedy to seek. So the bill provides that, before a court can grant an injunction, the court must be satisfied that the primary purpose of the website is to infringe copyright or to facilitate the infringement of copyright. I repeat again: the carriage service provider, the CSP, will be impacted on only if the court is satisfied that the primary purpose is to infringe copyright or to facilitate the infringement of copyright.
The primary purpose test is built into the bill and is a high threshold for the applicant to meet and that is a necessary protection for CSPs so that they are not targeted if their main purpose is actually a legitimate purpose. Some examples of legitimate purposes include an art gallery website, which is operated from another country, or even the iTunes store, a site where I seem to be investing most of my disposable income. I have moved on from cassettes—that was not so good—CDs were also not a wise decision. I am now investing in iTunes.
I never moved into records, Member for Melbourne Ports. Perhaps that would have been a wise financial decision, but I would not change it at all. Music is such an important part of my life. In both of these examples the CSP is legitimately providing content for the purpose of selling that content and benefiting the holder of the copyright. There may, however, be occasions where the photograph on the art gallery website is not properly authorised, or iTunes is not licensed to distribute a particular item in Australia—something which I occasionally come across when tracking down some of the more obscure bands that I like to listen to.
No-one would seriously contend that, in those particular cases, websites like iTunes should be disabled. However, this legislation is designed to disrupt those websites that are flagrantly acting as conduits to pirated copyright material. It is important that, when such a serious consequence as disabling access to a website is at stake, there should be safeguards in place. The bill provides that before a court can grant an injunction it must consider 11 mandatory factors contained in the legislation: (1) the flagrancy of the infringement of the copyright; (2) whether the website makes available directories, indexes or categories of the means to infringe copyright; (3) whether the owner of the website demonstrates disregard for copyright generally; (4) whether the access to the website has been disabled by orders from any court of another country; (5) whether disabling the access is a proportionate response to the infringement of copyright; (6) the impact on any person or class of persons likely to be affected by the grant of the injunction; (7) whether it is in the public interest to disable access to the online location—an important consideration; (8) whether the owner of the copyright had notified the operator of the online location as required under the legislation; (9) whether any other remedies are available under the Copyright Act; (10) any other matter prescribed by regulations; and (11) any other relevant matter. It is a non-exhaustive list, so the court can consider any other relevant matter. This judicial discretion is another safeguard—and an important one when the remedy sought is as serious as an injunction.
There have been concerns around this bill—in particular, that its provisions would extend to blocking virtual private networks, VPNs. The Senate Legal and Constitutional Affairs Committee has investigated whether that would be the case, and our Labor senators on that committee are satisfied that the provisions of the bill do not extend to the blocking of VPN usage. To eliminate any doubt whatsoever about the blocking of VPNs, Labor has asked that the government amend the explanatory memorandum to clarify this, and I am sure we will hear from the minister directly about this. I hope that the government will attend to that.
We are living in a digital era. As an occasional author, I appreciate how different the publishing world is today from even 10 years ago. At a Labor Party conference not that long ago, I remember arguing with the Hon. Craig Emerson about the parallel importing of books. I genuinely believed the arguments that I had then, but I see now how much Kindles and iPads have taken over the reading experience for people. Now they are completely commonplace on a plane; it is almost rare to see someone holding a paper printed book. We do need to have these arguments, particularly when it comes to supporting Australian endeavours. We are a small country, we are a long way away from Europe and the United States—from anywhere, some might argue—so it is important to support that Australian story wherever we can. I was particularly concerned today to revisit some of these arguments when the entertainment industry visited me to talk about a proposed review—supposedly a red-tape review in terms of a government deregulation agenda—that is going to have a particular challenge for the Australian entertainment industry. Australia's longstanding support for home-grown entertainment and entertainers could be under threat by the Attorney-General's review. It was quietly announced on, I think, 6 January; not even a press release came out about this review. The government is proposing to cut the requirements for taxpayer-funded productions to employ Australian actors and crew. This would completely undermine decades of work that has built up a viable local entertainment industry.
I should explain that the guiding principle for the current arrangements is simple: productions that are funded by Australian taxpayers should create opportunities for Australian actors and crews to work, gain experience and get the breaks they need to succeed here and on the world stage. That is how we are able to produce those great actors. That is a matter that the Attorney-General is advancing that we will discuss later down the track. If we are going to have a legitimate, strong, true Australian story, it is important that we make considered decisions that are in the national interest rather than just letting the market rip. That is not the Australian way at all. As I said, we had a similar argument when it came to publishing a few years back. Being aware of these changes, Labor, when in government, asked the Australian Law Reform Commission to launch an inquiry into copyright law in the digital economy. The resulting report was provided to the current government in November 2013. The government have been sitting on that report for 18 months. They have not responded to the report, let alone taken any steps to implement any of the recommendations made by the Australian Law Reform Commission.
Australia has a vibrant community of artists and creators. You see them everywhere; in fact, I met with a group of them last Friday in my electorate of Moreton at Sherwood: a group of painters and people who sketch, called The Half Dozen Group of Artists, who have been around for 75 years. And they are everywhere—they are what holds this Australian entity together by telling those Australian stories, whether you were fresh off the boat two years ago or whether your family roots go back to Governor Bligh and beyond. Whatever your story is, you tell that Australian story. But this sector needs support. The artistic sector does not need the uncertainty of funding cuts and an Attorney-General who wants arbitrary control of the funding that is left. They do not need the uncertainty of outdated regulations around the new digital era in which they are contributing. This bill is a small measure to help reduce the current levels of online piracy in Australia, and I support the government's endeavours.
The Copyright Amendment (Online Infringement) Bill 2015 relates to producer interests, the interests of the creative industries, that create content like music, video and software. It is important for our nation to provide appropriate support for producers because without them obviously there is no content. As much as it is appropriate to consider producer interests, as representatives we should also consider consumer interests. We should concern ourselves with dealing with the consumer interests when it comes to content that is available to people here in Australia.
It is fair to say that Australian consumers of digital products want fair and timely access to content. It has been described as being more of an issue about service than about price—in other words, the view is that if consumers had more convenient and timely access to digital content then the fact that they would also have to pay for it would not dissuade them from using that lawful way of obtaining content. That is not just my view. That concern has been around for some time in relation to how people can get access to digital content in this country in a fair and timely way.
Last year the research firm Essential Media Communications undertook research that indicated that 79 per cent of Australians are concerned about being charged significantly more than their US counterparts for digital products and 58 per cent were concerned that movies and TV shows were available for legal download in other countries but not in Australia. The Abbott government, though moving on this producer interests bill, has done in my view regrettably little to deal with the legitimate community concerns about the detriments that consumers face in Australia when compared with other nations. Price discrimination in relation to digital content continues to affect Australian households.
A very old friend of mine, Michelle Richards, recently wrote a paper on some of the motivations around piracy in Australia. I think she quite neatly summarised the issues of consumer access to content so I am going to quote her, which will come as a surprise to her. Unfortunately, I have not had time to mention this to her, so I hope she does not mind. She said:
Within the Australian television media landscape, a unique industrial, institutional and legislative framework shapes consumers' viewing habits. Australia's commercial media ownership is one of the highest concentrations in the world … and our isolated geographic location as an English-speaking country amongst Asian markets has meant that English and American media companies and local distributors were free to designate price according to demand without competition … This became commonly known under the term, 'The Australia Tax'—
a term that is commonly used to describe the level of price discrimination that we have in Australia. She went on to say:
There have been recent demands on the ACCC … to look into the unfair pricing practices of these streamers who charge up to 376% more for digital content when compared to overseas markets …
This issue of competition is changing here in Australia. We have seen the introduction of services like Stan, Presto and similar services from pay-TV providers. There is still an issue for Australian consumers in relation to access to digital content such as movies, television, music, software et cetera.
It is fair to say that people are concerned about what this bill and this government are doing to address those consumer concerns, not just the producer concerns. Those are legitimate questions to be asked of this government. That is not to say that we should not be looking at legislative and regulatory mechanisms to combat piracy—of course we should. On our side of the House we agree that action is needed to reduce current levels of online piracy in Australia. We understand the need to make sure that creative industries can remain in a situation where they have viable business models. If you are not fully recovering the revenue you ought to recover in respect of the content that you have developed then that is obviously of great concern to the businesses concerned. We are talking about an important and vibrant creative industry sector in Australia, which is something that people on both sides of this parliament have worked for many years to promote.
I am informed that our nation continues to have a high level of piracy by international standards. Of course that necessarily leads to economic damage and leads to adverse impacts for jobs in content production and creation here in Australia. Accordingly, we continue to say that more should be done for consumers and looking at the pricing issues in respect of the content, but we are prepared to support this bill, which we believe to be a modest and common-sense measure that is intended to disrupt foreign websites operating as havens for piracy and to discourage copyright infringement by Australian consumers. It is true that some websites seem to be set up for the direct egregious purpose of taking away intellectual property or breaching copyright and of harming producer interests. This bill is directed at foreign websites whose primary purpose is to infringe copyright or facilitate the infringement of copyright. It is an important yet balanced bill when it comes to trying to disrupt some of the piracy that is occurring in Australia at the moment.
I am sure other speakers in this debate have spoken about the number of times that, for example, the fourth season premiereof Game of Thrones was downloaded. There were nearly 200,000 separate downloads in Australia. The companies do try to fast-track broadcasts of their television shows that drive demand—they do try to innovate in that regard—but the fact is we continue to have a piracy issue. It appears to be really a product of the issues I have mentioned and also something that has grown up over a long period of time. There is not really the same sort of stigma, notwithstanding the best efforts of some of the creative industry sector, around piracy in Australia that there might be in other places. That is a cultural question as well.
In supporting this legislation I think it is really important that we—and each speaker on this side of the House will—be really clear about what is not affected by the passage of this legislation. In our view this bill does not provide for an Internet filter. It provides a judicial remedy on a case-by-case basis for conduct that flouts existing law. The requirements of the bill are strict and we can expect Federal Court judges to exercise the site-blocking power cautiously and with restraint.
As someone who has herself practised in the Federal Court and who is familiar with applications for injunctions brought in the Federal Court—though not under copyright legislation, I will admit—I will say that one of the great strengths of the Australian judicial system is the great degree of expertise and responsibility exercised by the many learned judges that we are so fortunate to have in the Federal Court of Australia. When we look at striking the balance between the interests of producers and consumers, it is wrong to cast that into some sort of dichotomy. They are not necessarily oppositional interests, because there is obviously a great deal of connection between the interests of a producer and the interests of a consumer. As I said at the very outset, as a consumer of digital content I have an interest in having producers in Australia who actually are able to have a viable business model for creating that content. But I think the Federal Court of Australia is very well placed to strike that balance and to take a measured and appropriate approach when it comes to applications for injunctions in respect of websites whose primary purpose is to flout copyright laws. So, with great respect to the learned judges of the Federal Court, of course our parliament can be very confident that they will exercise their powers with appropriate degrees of restraint and in a manner that is cautious and appropriately strikes the balance between the sometimes competing and sometimes aligned interests of the different parties.
We are conscious that there have been some concerns raised about whether this legislation may block virtual private networks—VPNs as they are referred to. We have worked very hard to seek to ensure that that is not the case. As you know, Deputy Speaker, Labor senators on the Senate Legal and Constitutional Affairs Legislation Committee investigated this specific issue about VPNs and whether this legislation would affect VPNs' usage. Those Labor senators formed the view that the bill's terms would not extend to blocking VPN usage. To assist in ensuring that the legislation is construed that way, we have asked the government to amend the explanatory memorandum appropriately to clarify that that is not the intention of this legislation, and we anticipate that the government will take that action and will appropriately amend the explanatory memorandum. As I said at the outset, it is important, though, for government to think about what some of the drivers of anticompetitive behaviour, or perhaps just the absence of sufficient competition, might be in the market and to find ways to ensure that consumers benefit from the pricing benefits of having greater competition. It is a view that I suspect that everyone in this House would very likely share.
It is also important that the government pursue copyright reform more broadly. As you know, Deputy Speaker, Labor commissioned an inquiry by the Australian Law Reform Commission into copyright law in the digital economy when we were in government. The ALRC provided the incoming Liberal government with its report in November 2013, but disappointingly, 18 months later, the government has still not responded to that report or taken any steps to progress the full suite of reforms proposed by the ALRC. Perhaps the Attorney-General has been a little bit distracted with trying to repeal section 18C of the Racial Discrimination Act, but I would suggest that a better use of the Attorney-General's time would be to consider what actions might be taken to improve and reform copyright law. As you know, there are a lot of views in this country—from producers, consumers and consumer advocacy groups alike—that there is quite a pressing and urgent need for modernisation in respect of copyright law.
This is an important bill. People might say, 'Well, who cares if people are downloading particular shows?' or, 'Is this really the most important issue?' but it is a very important issue not just for the creative industries, not just for the many, many jobs in those industries and not just for the great economic benefits that our country derives from having creative industries here at home but also because this is a broader question of access to arts and culture in our society. The fact is that it is so important that people from all social strata, whatever their background, have access to the rich cultural life that our digital economy is now affording to people and that digital content is now delivering into homes. There is so much choice out there. There is so much access to high and low culture through these digital forms, and it is really important that that not just be reserved for the people with the fastest broadband, the most money or the most technical proficiency. It is important that we deal with these issues of access to culture as a broad issue of concern to the entire Australian community.
I look forward to continued and ongoing discussion about all of the many facets of dealing with this question of access to online content. I mentioned software, movies and music. It was remiss of me not to mention gaming, which is of course a massive industry in itself. We do need to continue to engage. I know that change is fast, and I know that all of these issues are evolving very quickly and that governments of any persuasion can be a little slow to keep up with change, but the challenge for us, if we want to be a modern nation where people participate fully in the cultural life of the nation, is to find ways to improve the way that we grapple with copyright and all of the full suite of issues in respect of digital content.
As I say, we are supporting the bill. We believe it is modest and reasonable. We are fortified in our support by the fact that the Federal Court of Australia will be taking a responsible and cautious approach to dealing with applications under the legislation. We continue to believe that pricing remains an issue, as does access to service. I know that the market is improving, but there is still more to be done here in Australia. On that basis, I appreciate the opportunity to speak to the bill. We, as I say, will always take a critical and moderate approach to supporting any interventions in this area, because it is quite a nuanced and faceted question, but this, we believe, is a moderate and appropriate approach to the issue of combating online piracy.
Australian art, music, literature, film and television are an integral part of our culture and contribute significantly to our economy. These things that we value do not exist without creators. These creators need incentives and rewards for their endeavours, and a robust copyright framework is needed to provide these incentives and rewards.
The advent of the internet has enriched society with the ability to access and share information and ideas to an unprecedented degree. Digital disruption, globalisation, convergence and mass connectivity are upheaving the world around us and fundamentally changing the way we work, interact and are entertained. To get a sense of the pace, think that just 10 years ago the first video was uploaded on YouTube, and Android was a small start-up that Google had just acquired. No-one had a smartphone. Today, 300 hours of video is uploaded onto YouTube every minute. On the one hand, the internet is a platform that innovative businesses have exploited to provide consumers with a great variety and choice of content and ways to access copyright; however, on the other hand, the rapid growth of the internet has brought significant challenges to the protection of copyright due to the ease with which material can be digitally copied and shared at little or no cost.
Overall, in net terms the internet has been a very positive development, with profound social, educational and economic benefits. This is, without any doubt, the most exciting time in human history to be alive, and the internet is a very, very substantial part of that excitement, of that sense of disruption and change and innovation and excitement. But it has also caused some people to treat all content online as something that they are entitled to access for free, regardless of the views or the rights of the owner. This attitude has been extended to creative works produced by artists, actors, directors, producers and writers, who rely on copyright protection to make a living and to fund the production of new works. Unfortunately, those who wish to access infringing-copyright material currently have the means to do so easily and freely.
There is no silver bullet to deal with internet piracy, but the Copyright Amendment (Online Infringement) Bill 2015 provides an important part of the solution to the problem of online copyright infringement. It is vital that copyright owners have an efficient mechanism to disrupt the steady supply of infringing content to Australian internet users from overseas based websites. This bill will provide an enhanced, streamlined mechanism that enables infringing material to be blocked by a carriage service provider—an internet service provider—without the need to establish fault on the part of that provider. Specifically, the bill will introduce a new provision that allows a carriage service provider to disable access to infringing online locations located outside Australia.
The bill contains a number of safeguards to ensure that the power does not unduly encroach on other important public and private interests. First, the provision will only capture online locations where it can be established that the primary purpose of the location is to infringe, or facilitate the infringement, of copyright. As I made clear in my second reading speech, these amendments are designed not to apply to virtual private networks, or VPNs, that are promoted or used for legitimate purposes. VPNs have a wide range of legitimate purposes, not least of which is the preservation of privacy—something which every citizen is entitled to secure for themselves—and they have no oversight, control or influence over their customers' activities.
I have used the example of an Australian using a VPN to create the impression that they were located in the United States so that, when the American site saw the IP address, they would see a US IP address. This Australian could then—and this is widely done—purchase the content in the normal way with a credit card. The owner of the Australian rights to the content so acquired might well be quite unhappy about that, but they could take a remedy against the American site or the underlying owner of the rights. This bill does not apply to a site like this. It is not intended to apply to VPNs.
Where someone is using a VPN to access, for example, Netflix from the United States to get content in respect of which Netflix does not have an Australian licence, this bill would not deal with that, because you could not say that Netflix in the United States has as its primary purpose the infringement, or facilitation of the infringement, of copyright. This is a very important point to make. If Australian rights owners have got issues about American sites selling content to Australians in respect of which they do not have Australian rights, they should take it up with them. The big boys can sort it out between themselves and leave the consumers out of it.
The second safeguard is the broad range of factors that reflect competing public and private interests that a court can take into consideration, and those factors include, for example, the flagrancy of the infringement or its facilitation; whether blocking access to the online location is a proportionate response in the circumstances; and the overall public interest.
The Senate Legal and Constitutional Affairs Legislation Committee has recommended that the bill be passed subject to four recommendations for improvement. The government thanks the committee for its deliberations and has accepted all of these recommendations, which have been addressed by the amendments to the bill and the explanatory memorandum that I am tabling today. The government has introduced an amendment to the bill which would give the Federal Court discretion to take into account specified matters in deciding whether to grant an injunction—rather than being required to take these matters into account—and what weight to place on these factors. This is consistent with the approach normally taken by a court in assessing whether to grant an injunction.
The government also proposes, in light of the committee's recommendations, two amendments to the explanatory memorandum. The first clarifies that appropriate orders that the Federal Court may make in granting an injunction could include a requirement that parties set up a landing page to which subscribers will be diverted if they try to access a disabled online location.
The second clarifies that, consistent with case law, carriage service providers should not be exposed to legal actions by subscribers as a result of acts or omissions in compliance with an order and that the court has discretion to make appropriate directions on the costs of implementing an order.
A further amendment proposed is to clarify the operation of the primary purpose test. Specifically, an online location could have the primary purpose of copyright infringement even if it operates in such a way that it derives profits from advertising revenue.
The government has also committed to review the operation of the bill 18 months after its commencement. I want to stress this point that I made earlier: we recognise that we are living in a very dynamic and disruptive environment, powered in large measure by the internet. We believe this is a very good policy response to this problem of internet piracy. We are comforted by the fact that the opposition is supporting the bill, and I want to acknowledge the support and constructive collaboration that the Attorney-General and I have had from the shadow Attorney-General, the member for Isaacs; and the shadow communications minister, the member for Blaxland. If this bill does not work as well as we would like, we will look at it again.
Both sides of politics have to recognise that the objective is to ensure that the creative industries that the member for Griffith was speaking about only a moment ago are fairly rewarded for their efforts and that online piracy is brought to an end, so we have to be very agile in our approach to this. This is a good set of measures. It is the best model we have at the moment, but, if it does not achieve its objectives, we have got to be prepared to come back and change it. That is why we are committed to reviewing the operation of the bill 18 months after its commencement.
The bill is not intended to operate in a vacuum. The availability of content that is timely and affordable is a key factor in the solution to online copyright infringement. When infringing sources of content are disrupted, this disruption will be most effective if Australian consumers have legitimate sources to turn to that provide content at competitive prices and at the same time that it is available overseas. Furthermore, the industry code negotiated by internet service providers and rights holders is intended to provide a mechanism to inform Australian consumers of legitimate sources of content. The industry are in final negotiations around how that code will be paid for and implemented, and the ACMA is currently considering whether to register this code.
In conclusion, the bill provides an effective contribution towards addressing the longstanding problem of online copyright infringement and it does so in a proportionate and balanced way that takes into account other important public and private interests. It was the result of extensive consultation and it complements other initiatives by industry. I want to thank all honourable members who have contributed to this debate for their contributions, and I commend the bill to the House.
The original question was that this bill be now read a second time. To this, the honourable member for Isaacs has moved an amendment that all words after 'That' be omitted, with a view to substituting other words. The immediate question is that the amendment be agreed to.