Wednesday, 24 October 2018
Copyright Amendment (Online Infringement) Bill 2018; Second Reading
Labor will be supporting this bill, the Copyright Amendment (Online Infringement) Bill 2018, because it makes a number of improvements to the existing regime for protecting the rights of artists and others whose livelihoods depend on them being paid for what they create, whether that's music, movies, television programs, books or any other form of intellectual property. Labor supports this bill because it will strengthen the current regime under which a court can make orders blocking access to websites that have the primary purpose, or the primary effect, of infringing copyright.
While the digital revolution has created enormous benefits for our society and our economy, it has also been highly disruptive. The rapid expansion of online services has also created many new challenges for law enforcement. But we in Labor do not believe the online world should be allowed to exist as a lawless frontier. To the contrary, we in Labor understand the importance of effective regulation in this area, whether it's to stop the selling of illegal weapons, to shut down the vile trade in child pornography, to prevent online radicalisation of Australians by terrorist groups or, as this bill does, to prevent the theft of intellectual property.
This bill makes important improvements to the Copyright Act that will help to ensure it continues to protect intellectual property rights in the digital age. We in Labor recognise the vital importance of Australia's creative industries. Our musicians, our filmmakers, our TV production industry and our artists all contribute enormously to our society in both economic and cultural terms. The stories that Australians love most are our stories—stories about our nation, our history and our people. Whether on TV, on the big screen or in books, these stories are all produced by people who rely on copyright laws to protect their creative work. It is copyright laws that ensure that those in our creative industries are paid for the work that they do.
Chapter 9 of Labor's National Platform is entitled 'A fair go for all'. At paragraph 300, the ALP sets out the importance of maintaining copyright in the following terms:
The legal framework of copyright is necessary to ensure the income generated by arts, culture and heritage is fairly distributed between the creators and the institutions and entrepreneurs who make it available. A successful copyright framework will support the education, arts, culture, and heritage of Australia by:
Our policy on copyright is consistent with our long-held view about the importance of arts and culture in our lives.
Gough Whitlam talked about the arts as central to the lives of Australians, and his words remain fresh today:
In any civilised community the arts and associated amenities must occupy a central place. Their enjoyment should not be seen as something remote from everyday life. Of all the objectives of my Government none had a higher priority than the encouragement of the arts, the preservation and enrichment of our cultural and intellectual heritage. Indeed I would argue that all the other objectives of a Labor Government - social reform, justice and equity in the provision of welfare services and educational opportunities - have as their goal the creation of a society in which the arts and the appreciation of spiritual and intellectual values can flourish. Our other objectives are all means to an end; the enjoyment of the arts is an end in itself.
When last in government and over the last five years of opposition, Labor has been working to support sensible changes to our copyright laws to ensure that they remain fit for purpose in protecting our creative industries and our artists. One of the most significant threats to the music and screen industries since the advent of the internet has been the rise of online piracy, because online piracy undermines the capacity of creators, including musicians and screen industry professionals, to sell their work.
To help reduce online piracy, in 2015 Labor worked with the government to introduce amendments to the Copyright Act 1968 that allow the courts to issue site-blocking orders that oblige carriage service providers to block access to identified pirate sites. These site-blocking injunctions can only be issued by a judge and only for websites outside Australia that are proved to have the primary purpose of infringing copyright material. This regime under section 115A of the Copyright Act is necessary because many pirate sites operate in overseas jurisdictions with lax copyright laws. The pirate sites operating in these foreign jurisdictions are generally out of reach of Australian law enforcement, yet the damage their sites do to our creative industries and so to our economy is considerable.
Representatives of our creative industries and artists in Australia are very supportive of the regime introduced by section 115A, and since 2015 these reforms have been successfully used to block a number of pirate sites, with a measurable drop in the rates of online copyright infringement in Australia. However, rates of online copyright infringement in Australia remain high in contrast to comparable overseas jurisdictions, and new forms of copyright infringement are always being developed as the digital world rapidly changes.
This bill responds to the ongoing challenge of online piracy by strengthening the site-blocking regime in section 115A of the Copyright Act. In summary, this bill will, first, expand the services that can be subject to injunctions to include online search engine providers such as Google, in addition to carriage service providers such as Telstra, to compel the provider to take reasonable steps to not provide search results that direct users to copyright-infringing websites. This measure is intended to reinforce the regime by ensuring that searches do not provide easy pathways to already blocked copyright-infringing sites through alternative pathways and web addresses.
Secondly, this bill will allow injunctions to be sought to block access to sites with the primary purpose or the primary effect of infringing or facilitating the infringement of copyright. This addition of the words 'primary effect' is a significant expansion of the scope of the site-blocking scheme, which had been limited to sites with the primary purpose of infringing copyright only. Stakeholders had been concerned that new websites such as cyberlocker sites, which are frequently used for copyright infringement through file sharing of music, movies and TV shows but which it is difficult to prove exist for that primary purpose, fell outside the scheme. It's expected the addition of a primary effect test will bring such sites within the scheme but without unduly widening its scope.
Thirdly, this bill will also allow the courts to issue more flexible injunctions that can be adapted to maintain a blocking order without the applicant having to return to court for a new injunction when pirate sites change addresses or access pathways. These adaptable injunctions will provide for the blocking of additional domain names, IP addresses and search results, by agreement with the copyright owner and the service provider.
Fourthly, this bill will also help to avoid wasteful and difficult evidential inquiries for applicants to establish the location of web-hosting sites by putting in place a rebuttable presumption that an online location is outside Australia.
Finally, this bill includes a measure that will enable a minister, by disallowable instrument, to declare that particular online search engine providers or a class of those providers are exempt from the scheme. This last measure is essentially a safeguard to ensure that injunctions are directed only against larger service providers facilitating the infringing of copyright.
Creative industry representatives in Australia that Labor has been consulting with have already indicated support for the changes proposed in this bill. This includes our music and screen production industries. We know that the search engine providers have been actively involved in the battle against online piracy, and we trust they will continue that battle. Although some companies and individuals have expressed concern about the potential for this bill to be used inappropriately to shut down legitimate sites, we in Labor are satisfied that the bill contains adequate safeguards to prevent its misuse. In particular, I would point out that injunctions can only be issued in narrow circumstances by a Federal Court judge, with the onus of proof on the applicant seeking the injunction. In making a decision whether to issue a site-blocking injunction, judges may take into account a wide range of factors. Under subsection (5) of section 115A of the Copyright Act, the court may take the following matters into account, among others:
(a) the flagrancy of the infringement, or the flagrancy of the facilitation of the infringement …
… … …
(c) whether the owner or operator of the online location demonstrates a disregard for copyright generally;
(d) whether access to the online location has been disabled by orders from any court of another country or territory on the ground of or related to copyright infringement;
(e) whether disabling access to the online location is a proportionate response in the circumstances;
(f) the impact on any person, or class of persons, likely to be affected by the grant of the injunction;
(g) whether it is in the public interest to disable access to the online location;
… … …
(k) any other relevant matter.
And any decision by a judge to issue an order under section 115A is also, of course, subject to appeal.
We in Labor are pleased that the protection of copyright is an area of bipartisan agreement. In the past, we've been concerned that some of this government's ill-considered announcements on policies would roll back copyright protections, such as in relation to safe harbour laws. However, Labor stood with Australia's creative industries in opposition to the government's reckless plans to diminish copyright protections and we were pleased to see that the government backed down on those proposals. Labor is pleased to see that the government has come around to understanding the importance of regulating to protect the rights of our artists and the economic viability and cultural value of our creative industries in the digital era. We support this bill as a means to further these important objectives.
The Copyright Amendment (Online Infringement) Bill 2018 is about protecting property. It's about protecting a specific type of property, intellectual property, and it is about protecting the intellectual property of a pretty special group of creators—those who tell our stories through film, television and music. These are the people who will particularly benefit from our legislation to stop online piracy, and these are the people who deserve our protection.
We haven't done a great job of protecting our artists and creators in the past. Our protection of intellectual property has not kept pace with technology. For too long, people have been able to illegally access content created by the hardworking people who put their time and effort into films, TV shows or music and risk their money to do so. These people are writers, producers, directors, actors, singers, musicians and all the people who support them, from sound engineers through to costume designers. Our creative industries form part of what is more broadly known as copyright industries. According to the PwC's The economic contribution of Australia's copyright industries 2002 -2016 report, Australia's copyright industry employed over one million Australians—that is, one million and 22,000 people—and constituted 8.6 per cent of the Australian workforce. They also generated economic value of $122.8 billion, the equivalent of 7.4 per cent of gross domestic product, and generated over $6.6 billion in exports, which is equal to 2.7 per cent of our total exports.
Copyright industries are the third largest income generator in the Australian economy. More specifically, we know that our music economy contributes around $4 billion to $6 billion a year to the Australian economy. Boosting our music exports would also generate more income and more tourists might come to visit to see our bands. Already live music generates revenues of $1.5 billion to $2 billion a year alone. In my home state of South Australia, in any one month, around 70 per cent of live music gigs are performed in our pubs and hotels. I was delighted to recently see Jen Cloher, a fantastic Australian musical talent, at one of those fabulous hotels, the Grace Emily. That is an iconic live music venue in Adelaide.
Our pubs and their employees are a very important part of our live music scene. If we are not protecting the content these musicians create, their ability to survive—much less thrive—and to create is lessened. The flow-on effect hits our pubs and venues, and it has a cultural impact as well. Most of our musicians are small business people. They have to create, market and sell their content. They might employ other small businesses to help them do this and they might use subcontractors. These are all the people who suffer if a musician is not being paid for their content and if people are stealing that content through illegal sites.
This is also the case for our Australian film and television industry. A 2014-15 Deloitte Access Economics report, Measuring the economic and cultural value of Australia's screen sector, found that:
Broad Australian content refers to any screen content that is made under the creative control of Australians, including feature films, drama, documentaries, news, current affairs, light entertainment, reality shows, lifestyle shows, food shows, travel shows and sports content. Australian expenditure on the production of feature films; TV dramas, which includes miniseries; telemovies; serials and online drama, according to the 2016-17 Screen Australian Drama report, totalled $1.3 billion. Of this, there were 29 foreign projects, totalling $610 million; 41 Australian features, totalling $284 million; 46 Australian TV drama titles, worth $321 million; 13 Australian children's drama titles, worth $48 million; and, measured separately for the first time, $14 million in overall expenditure for Australian online drama.
We need to encourage our creatives to create and to tell our Australian stories, whether it's through music, film, art or literature. That means that we need to ensure they are properly rewarded for their creative efforts. I'm particularly passionate about protecting intellectual property because, before being elected to this place, I was a newspaper columnist. My income was reliant on my creative output. It was also reliant on my employers, The Age and then The Advertiser, being paid for their content. Whether you're a newspaper columnist, like I was; or whether you're a writer, a director, an actor, a musician or any of the people involved in our creative industries, you need strong copyright laws to protect your income and intellectual property.
This has been ever more challenging in a world where technology has outpaced the law. Letting online providers give away content for free, or turning a blind eye while others do, undermines artists', labels' and newspapers' income and their fundamental right to protect their creative efforts and their property. As AC/DC famously sang: 'It's a long way to the top if you want to rock and roll'. So let us not make it any harder for our artists, our musicians, our filmmakers, and our TV producers to do so, and let's protect their intellectual property when they do get the very 'long way to the top' that it takes to create, establish, and support a career.
This bill ensures that property owners can more quickly and easily enforce their property rights when their rights are infringed. A 2016 Productivity Commission inquiry report into intellectual property arrangements highlighted that:
Intellectual property (IP) arrangements offer opportunities to creators of new and valuable knowledge to secure sufficient returns to motivate their initial endeavour or investment. In this respect, they are akin to the property rights that apply to ownership of physical goods.
Copyright protects the material expression of literary, dramatic, artistic and musical works, as well as books, photographs, sound recordings, films and broadcasts. In addition to being instrumental in rewarding creative and artistic endeavour, many creators value the recognition that the copyright system provides. It does so by granting creators the exclusive right to reproduce or adapt their work in material form as well as to publish, perform, and communicate their work to the public. Exercise of these rights is commonly licensed to intermediaries, such as publishers, record companies, film studios, broadcasters and copyright-collecting societies. We must support those Australians who tell our stories and who, by doing so, show us who we are, remind us who we were, and suggest to us who we one day might be.
This is highlighted by the findings of the 2015 Deloitte report in relation to our film and TV industry, which found that the total audience value of Australia's broad film and TV content viewing in 2014-15 was approximately $17.4 billion in consumer welfare benefit. This is almost seven times the size of the total value-add for broad Australian content. The report also found that Australian screen content was unique, with almost two-thirds, or 64 per cent, of Australian film and TV content considered to be fairly, very or completely different from foreign-based content, based on qualities such as storyline, setting, acting, music and camerawork. The role of our artists is not just important locally, it is critical to explaining our culture and our way of life to the world.
Online piracy hurts Australia's creative industries and is particularly damaging to our local film and television production sector. It results in lost remuneration for creators and investors, and provides a disincentive to produce new creative works. The Copyright Amendment (Online Infringement) Bill 2018 strengthens the existing successful website-blocking scheme introduced by the coalition government in 2015 by allowing more pirate websites to be targeted and by making it harder for pirates to circumvent blocking measures. Specifically, this bill will enhance the current website-blocking scheme in the Copyright Act 1968 by allowing a broader range of websites engaging in piracy to be blocked, by allowing injunctions to be made against online search engines, and by clarifying the Federal Court's power to make responsive orders to enable parties to agree to the blocking of future pathways to an existing blocked site . This means copyright owners will have the right tools at their disposal to fight online piracy.
Under the current legislative framework, the Federal Court can issue orders for internet service providers to block access to infringing websites. The Copyright Amendment (Online Infringement) Bill will ensure a broader range of overseas websites and file hosting services widely used for sharing music and movies are within the scope of the scheme, and will provide a means for proxy and mirror pirate sites to be quickly blocked. The amendments will also further empower copyright owners to seek Federal Court orders requiring search engines to demote or remove search results for infringing sites. This bill is an important measure to address online copyright infringement in Australia, which negatively affects our content creators and investors.
As co-chair of the Parliamentary Friends of Australian Music and as a member of the House Standing Committee on Communications and the Arts, I'm particularly passionate about protecting the Australian music industry and film and TV, so I want to take a few moments to talk about these more specifically. Australian musicians, as I've already noted, are small-business people. They make a significant contribution to our nation. Our Australian music industry is a wonderful success story whose interests are tirelessly supported by bodies like APRA AMCOS, ARIA and the PPCA who, like me, are keen to see this industry grow and artists rightfully compensated for their intellectual property. In particular, I would like to mention the following people whom I have come to recognise as passionate advocates for the music industry: chair of APRA, Jenny Morris OAM; chair of AMCOS, Ian James; and APRA AMCOS chief executive, Dean Ormston. The chair of ARIA, Denis Handlin OA, and CEO, Dan Rosen, are excellent advocates for their sector. I would like to mention Stephen Ferguson, the CEO of the Australian Hotels Association, for his support of the live music industry and all of the pubs that support our musicians. Over the past two years, here at Parliament House we have hosted talented artists like John Paul Young, Kasey Chambers, Ian Moss, All Our Exes Live in Texas, Daryl Braithwaite, Diesel, Daddy Cool, Eskimo Joe, and Montaigne, which has spread the message about the importance getting of our policy settings right in this area.
I was delighted to recently attend an event in support of the Make it Australian campaign, here at Parliament House, where we heard from renowned actors, writers and producers, including Judy Davis and Richard Roxburgh. I hope everyone in this place is an avid supporter of the television series Rake. I was delighted to meet Richard in person and spoke with him about how important it is to support our Australian television and film content. While legitimate content streaming providers like Spotify, Pandora, Stan and Netflix have opened up new ways of enjoying content and enabling Australian artists to be appropriately awarded for their efforts, the internet continues to create major challenges for the Australian arts industries.
Online copyright infringement reduces the livelihoods of Australian creators and investors, and foreign based websites continue to illegally distribute the content of Australian copyright owners. The operators of these sites are often difficult to find and are located in countries that do not have similarly strong laws. The impact of not getting these policy settings right is clear. That's why I'm delighted to speak on introducing this bill today and strengthening our existing successful website-blocking scheme, introduced by the coalition government in 2015, by allowing more piracy websites to be targeted and making it harder for pirates to circumvent blocking measures. As I have noted, online piracy hurts Australia's creative industries and it is particularly damaging to our local film and television production sectors. It results in lost remuneration for creators and investors and provides a disincentive to produce new creative works, whether it's in TV, film, music or other creative arts.
Finally, I want to quickly mention that, on Friday, 16 November is an excellent initiative started by the music industry in Australia and Support Act: Ausmusic T-shirt Day. Support Act is a registered charity founded in 1997 by the music industry for the music industry. It was established in recognition that a career in music brings unique rewards and challenges, sometimes including periods of financial hardship. Really, that's why we're here today: to make sure that people are paid for the work that they do. Ausmusic T-shirt Day celebrates our wonderful Australian music industry acts. I hope that everyone in this place will join me as we support the music industry on Friday, 16 November by making a donation and sharing a picture in your best band T-shirt. Mr Deputy Speaker Kevin Andrews, I'm sure you have many ready. You can use the #AusmusicTShirtDay to demonstrate your support and raise money for artists and music workers who are experiencing financial hardship, ill health, injury or mental health issues.
In rising to speak on the Copyright Amendment (Online Infringement) Bill 2018, I want to pick up on a point that the member for Boothby made—that the internet poses challenges in this area. Yes, it does, but the big challenge is the freeing-up of copyright to ensure that innovation can spread more widely and to face up to big rights holders and the types of hysterical arguments we get in this space. As lawmakers, just because we might get a selfie with Richard Roxburgh—I love Rake as much as anyone else—or a political party gets a donation from a rights holder, does not mean that we should stop looking at how to make the types of reforms that balance the needs of creatives and the needs of producers versus the needs of consumers.
No-one supports piracy. No-one should support piracy. Piracy is theft—I totally get that. We support this bill, but the problem is that the bloated, greedy, resistant-to-change rights holders will always refuse to reform in this space. Copyright reform is used as their way to shield themselves from the modern era, to shield themselves from new ways of doing things. The internet is not a challenge to rights holders; the mentality of rights holders to move with the times is the biggest challenge to rights holders in this country. Piracy is their go-to lever—'We're all about fighting pirates.' Apparently there are pirates all over the place who we have to be watching out for, who are ready to rip people off, who are demonising these hardworking rights holders. We get this argument all the time. These rights holders think that, by constantly using legal mechanisms through this place and elsewhere, piracy will disappear. The reality is that piracy is a reflection of a market failure. I do not excuse, condone or support piracy, but I do recognise that it is a reflection of market failure, where producers are making an offering that is not in line with consumer expectations and the access is not in line with consumer expectation.
What we are providing for with these types of bills, which the rights holders all champion, support and claim credit for, is a form of regulatory hallucinogen, where they think that, if they get this type of regulatory reform through, piracy will disappear. No, it won't. When rights holders get serious about the consumer offering and the way in which they're helping consumers access content in a much more affordable way, that will have a bigger impact. This isn't some sort of highfalutin, 'utopic' view about this.
Thank you, Minister. If you look at times past where there was piracy enabled through file-sharing platforms, you had the rise of Steve Jobs, Apple and the iPod, then leading to the creation of iTunes, and their pricing structure for music basically made a consumer think deeply about whether or not they would take pirated content, with all the risks of malware and copyright breach, versus the simple process of buying a single for 99c through iTunes. So the proposition was changed. The rights holders even resisted Steve Jobs initially but then ceded way for him, because they figured that Apple's market share at that point in time was so small—why bother? But they also had pressure coming from a firm called Napster, which had opened up access to music in a way that had never been there before. When the member for Boothby talks about Spotify or someone else talks about iTunes, just know that the only reason those things existed was that Napster created the pressure on rights holders to reconsider their offering and the way that they did things. All the innovation that flowed through improving file transfer over communication networks happened because a bunch of teenagers on the other side of the Pacific thought differently about the way they would spread content.
But it would never have happened with rights holders, because they just want to maintain the existing arrangements to squeeze the maximum amount they can out of consumers. So in this debate I speak as someone who's standing up for consumers. I don't speak for this pro-producer legislation per se. I do support its ability to crack down on piracy, absolutely. But I think the voice of consumers needs to be heard more. And we'll have people who'll argue passionately for this but will also argue, at the same time, that we need trade liberalisation. I mean, the coalition argues for it all the time in this House. There are massive benefits, and I'm a supporter of trade liberalisation. My arguments are consistent. Opening systems up has delivered benefits to economies and communities. The old way of always dragging down on the regulatory lever to see certain things occur has short-term benefit but long-term loss. Trade liberalisation opened things up. So if you're in favour of trade liberalisation, you can't argue against the refusal to reform copyright in the way that we hear often being advanced.
The coalition bring forward this type of legislation because they don't have the guts to stand up to the rights holders. They will not stand up to the rights holders on key reforms in copyright like safe harbour reform—too hard for them. They will not argue for it because the big rights holders continually beat down on any move to open up in this space. Some of the arguments these rights holders use are incredible. Graham Burke, from Village Roadshow, likened Google to big tobacco. That's what Graham Burke said as a rights holder. It's embarrassing that that is the level of advocacy by rights holders. But this is what these people think.
This bill will allow what Graham Burke and all the others want, which is: 'If other countries in the world can curate what you find on a search engine, we should be able to do it too but for rights holders.' That's what they press for. This is the type of argument that's been put forward. And they want someone else to pick up the bill—be it a telco that has to respond to a court case where someone has launched, as a rights holder, this type of thing. They'll do that. The rights holders want their rights defended, they want other people in the economy and the business community to pay for it and they want consumers to have less choice. In the meantime, technology advances to such a point that it renders those business models obsolete.
As I said, no-one supports piracy, but I don't support regulatory hallucinogens like this—where they just think that, if they clamp down on piracy, their need to reform their business model goes away. Wrong. There are some big rights holders who fight modernity, who want to see everything on the internet have a dollar sign in front of it or for content to constantly sit behind a paywall—and then have that offering out of step with what consumers are prepared to pay for. Let me give an example. Most online media subscriptions will cost you anywhere from $25 to $30. You can go onto Spotify and get a subscription to all the music you want for 12 bucks a month—half of that. on Spotify. I have to pay 30 bucks for maybe 30 to 35 issues of news content through News Limited—it's 32, I don't want to mislead the House—versus what you get on other offerings. Now, there is a rightful case to be said about the way in which the model may be undermining the ability for us to have quality journalism. I totally get that, and it is a right And there are also people who argue against Spotify not providing the artists the income levels that they need. I think that is a fair argument too, and it needs to be had. but we don't shut down the platform because it threatens a rights holder's model.
I'll argue this case consistently, like I said a few moments ago. Trade liberalisation and opening up pathways are very important. We opened up the economy in the Hawke-Keating years. We had a lot of people, particularly those whom we represent here, who were impacted on by those reforms. We didn't say, 'We won't do it because it'll have a negative impact.' We look at the transition on the way through.
I don't argue this with any vested interest, either. Just like when my side of politics said, 'We're going to change negative gearing rules,' I didn't say, 'I've got an investment property and, therefore, I'm not in favour of negative gearing reform.' I never said that. I think it is important to reform negative gearing and it is important to open up the economy. I challenge rights holders and those in the creative community and say, 'Why is it that you're resistant to reform but everyone else in the economy has to go through it, changing the way that they work, providing for lower cost in the system, providing for a better form of remuneration down the track through changing the way systems operate?' Those are the things that should be looked at—not us being used, in this chamber, to advance commercial interests for people who refuse to move with the times, which is exactly what we get when it comes to copyright.
There is a failure of this place to be able to see genuine reform on safe harbours where new digital platforms are emerging in this country, created by businesspeople in this country, that provide a new way for artists and manufacturers alike to create a new income flow. We say, 'It's too hard to have the legal sword that hangs over their heads because they could be challenged by someone in any part of the world.' In the case of Redbubble, as I've previously told the House, they were challenged and taken to court by the Hells Angels because they thought their copyright had been breached by Redbubble, which was operating out of Melbourne and providing hundreds of jobs and huge economic opportunities for content generators—artists and the like. That's what exists. Redbubble was taken on by Sony because of apparent breaches to do with Pokemon. The legal case was upheld and Redbubble was charged the princely sum of $1 as a fine by the court because Redbubble had a whole series of mechanisms in place to be able to respond to concerns about copyright breach and to ensure that artists were looked after. We need to find a way in copyright reform to rightly protect artists and their income and livelihood but also to allow other innovative companies be able to generate, through innovative ideas, new ways of getting things done, to create commercial value in the growth of those firms—such as Redbubble, Bardot, 99designs and the like—and to have those firms and platforms thrive, survive and grow. That's what should happen.
Like I said, by all means, let's support this bill. But let's not support this sort of camouflaging of reality that exists where the rights holders don't do anything about their business model—they just ring the bell and get us to rush in here with another bill about piracy while they don't actually keep step with modern times. It's just inconceivable that we continue to allow this to occur. Again, if we clamp down on piracy in the way that we're doing, we need to see an equal effort by rights holders to demonstrate how they are offering new ways of getting thing done and providing accessible, affordable content to users. If they don't do it, other market providers in other parts of the world are going to do it and our people—Australian consumers—will find a way around it.
I imagine at some point we're going to have a debate in here about banning VPNs because they allow people to access content on other sides of the planet that aren't able to be accessed here. At what point do we see the rights holders make that argument? I wouldn't be surprised if we see it soon. If we got some rights holders saying, 'Google's as bad as big tobacco,' I don't hesitate to think that they'd come back with that proposition. Again, we've got to find a way to protect and enhance artists' income but also allow other innovation to occur in the Australian economy without always having this binary debate that says, 'Copyright reform is completely bad and can never be countenanced.' It's just not sustainable.
The legal framework of copyright is necessary to ensure the income generated by arts, culture and heritage is fairly distributed between the creators and the institutions and entrepreneurs who make it available. I want to make some brief remarks on the Copyright Amendment (Online Infringement) Bill 2018, which makes important improvements to the Copyright Act that help to ensure it continues to protect intellectual property rights in the digital age. Labor will be supporting the bill because it makes a number of improvements to the existing regime for the blocking of websites that infringe copyright.
In turning to the digital age in which we find ourselves, the digital revolution has created enormous benefits for our society and our economy. But it has also been highly disruptive. Around the world—and we should never think that this is particular to Australia—lawmakers continue to grapple with the regulation of the internet. Indeed, earlier this month, the Minister for Communications and the Arts delivered a speech to the Sydney Institute entitled, 'The internet: not an ungoverned space'. But, of course, in Australia we have long moved on from the question of whether or not the internet is governed. While the minister for communications may only have recently become alive to it, Australia has long recognised the internet as a governed space—and, indeed, has regulated it.
Well over 20 years ago, the Parliamentary Library published a research paper entitled, 'Can the internet be regulated?' Among other things, that paper—which was written in 1995-96—noted that legislation that was being considered by the Australian states and territories provided an incentive for establishing a code of conduct, and the then Australian Broadcasting Authority had announced an inquiry into the regulation of content online services, proposing the exploration of various strategies, including codes of practice, complaints procedures and education programs, in addition to devices for blocking or filtering certain material and offence provisions.
Following that, early legislative reforms directed at regulation of the internet in Australia included amendments in 1999 to the Broadcasting Services Act 1992, which established a regulatory regime for internet service providers and online content. Other early legislative measures included the Cybercrime Act 2001 and the Spam Act 2003. Alongside these developments at the turn of the millennium, the High Court of Australia delivered its landmark case in Dow Jones and Gutnick, which had repercussions far beyond defamation litigation, for which it was concerned. The speech by the minister for communications this month stated that it is important to recognise that the internet is 'not the "Wild West", where the rule of law and standards of decency shouldn’t apply'.
However, the question has long been not whether to regulate the internet but how to best regulate the internet. Copyright scholars were quick to recognise the impact of code, governance and regulation of content on the internet. In her review of 'Law and Internet Cultures by Kathy Bowrey' in the 2005 Sydney Law Review, Kim Weatherall stated:
As a teacher of Internet Law, I often see debates in class divide between those who fear too much control, and those who are confident that law is futile here. The dichotomy makes for an easy debate, but one that is ultimately cynical and unsatisfying. Not only does the discussion degenerate to technical issues that are a matter of conjecture, but, convenient as such dichotomies may be, they conflict with our intuitive sense of the way things actually work. We know that both the early cyber-libertarians and cyber-cynics were wrong, and we know that the future is neither one of perfect control, nor of powerlessness.
It's instructive to go on further, because she states:
Ever since the earliest writings in Internet Law Scholarship, commentators have tended towards one of two opposing views. One the one hand, we have what you might call the Orwellian vision: that formal Law, in partnership with Technology will tend towards the ‘perfect control’ of the citizenry, whether by public or private entities.
This basic ‘Code is Law’ idea has been discussed, refined, developed and critiqued, but it remains influential in current debates. In copyright law, for example, the fear of ‘digital lock-up’ through a combination of technology and law continues to surface in current discussion of anti-circumvention law. It can also be seen in debates about privacy law, reflected in fears regarding the digital potential for omnipresent surveillance and data collection, facilitated by privacy laws that are insufficiently protective of individual rights.
While it is great to see the Minister for Communications catch up on the idea that laws and norms, including copyright, should apply in the virtual world, just as they do in the physical world, the fact is that a nuanced and detailed debate about copyright and the digital economy has been going on for a long time.
In 2012, the Australian Law Reform Commission received terms of reference for an inquiry into copyright and the digital economy. The ALRC was asked to consider whether exceptions and statutory licences in the Copyright Act were adequate and appropriate in the digital environment and whether further exceptions should be recommended. The issues considered by the ALRC covered a broad range of topics, from caching and indexing to cloud computing; online use for social, private or domestic purposes; transformative use, such as mash-ups or sampling in music; and retransmission of free-to-air broadcasts. The inquiry also looked at issues affecting libraries and cultural institutions, such as preservation and digitisation, contracting out of copyright exceptions and orphan works—that is, works where the owner of copyright cannot be easily established.
I want to look at Labor's calls for stronger restrictions. Over the last five years in opposition, and when we were last in government, Labor has been working to support changes to our copyright laws to ensure they remain fit for purpose in protecting our creative industries and our artists. One of the most significant threats to the music and screen industry since the advent of the internet has been the rise of online piracy, because it undermines the capacity of creators, including musicians and screen industry professionals, to profit from their work. We in Labor recognise the importance of Australia's creative industries. Our musicians, our filmmakers, our TV production sector, our artists—all of them contribute enormously to our society in both economic and cultural terms. A successful copyright framework will support the education, arts, culture and heritage of Australia by including, developing and maintaining a national identity in the Australian creative industries; protecting the intellectual property rights of content creators; supporting new and emerging Australian creative talent; meeting consumer expectations of speed to market; securing the supply and diversity of Australian-produced intellectual property; promoting creative, competitive, sustainable and innovative Australian creative industries; and promoting exports of Australian creative product to foreign territories.
To help reduce online piracy, in 2015 Labor worked with the government to introduce amendments to the Copyright Act 1968 that allow the courts to issue site-blocking orders that oblige carriage service providers to block access to identified pirate sites. These site-blocking injunctions can only be issued by a judge. This regime, under section 115A of the Copyright Act, is necessary because many pirate sites operate in overseas jurisdictions with lax copyright laws. The pirate sites operating in these foreign jurisdictions are generally out of reach of Australian law enforcement, yet the damage their sites do to our creative industries is considerable. Representatives of our creative industries and artists in Australia were very supportive of the regime introduced by these amendments, and, since 2015, these reforms have been successful in blocking a number of pirate sites, with a measurable drop in the rate of online copyright infringement in Australia. However, the rate of online copyright infringement in Australia remains high in comparison with overseas jurisdictions comparable to Australia, and new forms of copyright infringement are always being developed as the digital world rapidly changes.
This bill responds to the ongoing challenge of online piracy by strengthening the site-blocking regime in section 115A of the Copyright Act. In summary, this bill will expand the services that can be subject to injunctions to include online search engine providers, such as Google, in addition to existing carriage service providers, such as Telstra. It will compel the provider to take reasonable steps not to provide search results that direct users to copyright-infringing websites. This measure is intended to reinforce site-blocking orders by ensuring that searches do not provide easy pathways to blocked sites through alternative pathways and web addresses. It will allow injunctions to be sought to block access to sites with the primary purpose or primary effect of infringing or facilitating the infringement of copyright. This is a significant expansion of the scope of the site-blocking scheme, which had been limited to sites with the primary purpose of infringing copyright. Stakeholders have been concerned that new websites—such as cyberlocker sites, which are frequently used for copyright infringement through the file-sharing of music, movies and TV shows, but may not exist for that primary purpose—fell outside of the scheme. It is expected that the addition of a primary effect test will bring such sites within the scheme.
This bill will allow the courts to issue more flexible injunctions that can be adapted to maintain a blocking order without the applicant having to return to court for a new injunction when pirate sites change addresses or access pathways. These adaptable injunctions will provide for the blocking of additional domain names, IP addresses and search results by agreement with the copyright owner and the service provider. This bill will help to avoid wasteful and difficult evidential inquiries for applicants to establish the location of web hosting sites by putting in place a rebuttable presumption that an online location is outside Australia. The bill will enable the minister, by disallowable instrument, to declare that particular online search engine providers, or a class of those providers, are exempt from the scheme. This last measure is essentially a safeguard to ensure that injunctions are directed only against larger service providers facilitating the infringement of copyright.
In conclusion, creative industry representatives in Australia, with whom Labor have been consulting, have already indicated support for the changes proposed in this bill. This bill that is now before us is primarily aimed at preventing digital piracy for the benefit of Australian creative industries. The online world has created many challenges for law enforcement. We know that search engine providers have been actively involved in the battle against online piracy, and we trust they will use the tools these amendments provide to continue that battle.
We, in Labor, are pleased that the protection of copyright is an area of bipartisan agreement. In the past, we have been concerned by this government's ill-considered announcement on some policies that would roll back copyright protections, such as in relation to safe harbour laws. However, Australian creative industries united in opposition to the government's plans at that time to diminish copyright protections. We were pleased to see that the government, in that case, backed down. Labor is pleased to see that the government has come around to understanding the importance of regulating to protect the rights of content owners in the digital era, and we support this bill as a means to further that objective.
I rise to speak on the Copyright Amendment (Online Infringement) Bill 2018, and thank the member for Greenway for her considered contribution. I'll say from the outset that Labor supports this bill. Labor has a long track record of supporting Australia's arts community and creative industries and all the jobs that come with that. That especially includes supporting them by ensuring sensible reform to our copyright laws so that they are fit for purpose in a fast-changing industry.
The digital era is upon us, and it brings its own challenges for the creative industries and the artists who have input into them. I know the blood, sweat and tears that go into making a piece of creative work, whether it be a film, something on the screen or the small screen; on the page, like poetry or a book; or even through the airwaves. A small part of the author or the artist is left behind when they put out their piece of art. It must be especially galling when a creative work is used without permission and without the appropriate payment to the artist and those who support the artist. Fundamentally, to do so is theft. But it also shows a lack of respect for the artists.
Online piracy is a significant threat to the music and screen industry in Australia. As fast internet now allows us to download in record time, online piracy has taken off. Labor has already done some work with the government in this area in 2015. Those changes allowed the courts to order providers to block access to identified pirate sites through an Australian Federal Court injunction. That was important because many of the pirate sites operate in overseas jurisdictions and are out of the reach of our own Australian laws. Blocking the sites themselves means that Australian audiences are unable to access these pirate sites. Those reforms were successful. However, it is not easy to obtain an Australian Federal Court injunction. It takes time, and there are costs associated with it. As soon as that door has been largely closed, what do unscrupulous operators do? They find another door or they make a door ajar with their crowbar and push through. Our laws need to keep up with an ever-changing copyright infringement landscape.
So this bill will expand the services that will be subject to the previous reforms. Online search engines will be included. A Federal Court injunction can compel a search engine to take reasonable steps to not provide search results that direct users to copyright-infringing websites. Sites that have the primary purpose or primary effect of infringing or facilitating an infringement of copyright can now be blocked. That is the intent of the legislation. This is a significant expansion of the previous reform, which was limited to blocking sites with the primary purpose of infringing copyright.
This bill will also allow more flexible injunctions so that, when a pirate site changes its address or access pathway, the injunction can be adapted without the need to return to court. To streamline the court process to obtain an injunction, this bill adds a rebuttable presumption that an online location is outside of Australia and therefore within the blocking mechanism of this legislation.
So that is why I support this bill and why the Labor Party will support this bill. It is important that Australia's creative industries are protected and fostered. Our musicians, our filmmakers, our TV production industry, our artists, our authors—they're all important to our culture and, significantly, to our economy, as so many jobs are associated with these artistic endeavours. The continued prosperity of our creative arts community is dependent on our creative artists being able to protect their original work and negotiate compensation for its use. So we're also looking after publishers, film distributors and all sorts.
The voice of Australians needs to be heard in our Australian books. We need stories that are told by Australian writers. I'm a co-chair of the Parliamentary Friends of Australian Books and Writers. My co-chair is Senator Linda Reynolds, who has continued her role after gaining a ministerial position. It's great to work with her. This year, Senator Reynolds and I hosted the announcement of the writers short-listed for the Miles Franklin award, and it was a wonderful night. These writers told the stories in their books about us—about Australians. They have a national focus. They also reach out all around the world, obviously, but they're still Australians telling Australian stories. Who else is going to tell those stories but Australian writers?
Obviously, I particularly note the Australian publishers who support those writers. Without them, we would not have the enjoyment of all of those books—well, from my youth, and from going to teachers' college, books such as Such is Life by Joseph Furphy, all of Thea Astley's work, and the works of Janette Turner Hospital and David Malouf. I know that has a particular Queensland flavour, but there's also Henry Lawson and so many other great Australian writers who have told our stories. They make us what we are as a nation—a nation with the longest history, the longest culture, the oldest culture, on earth. The oldest word on earth is an Indigenous word. But Australian writers also meld that with the modern Australian story—the story from all around the world that makes Australia what it is. How will our children hear these stories unless our writing community is able to prosper and thrive?
I'd give a particular shout-out to one of the recipients of the Queensland Premier's prize for literature, Michael Bauer, who I used to teach with many years ago. I congratulate Michael.
We have such a wealth of talented writers in this country, like Michael Bauer, but all of them struggle to make a living. It is so important that we protect their reward for the work that they do. Not all of them get to tell their stories to overseas audiences, so it's important that we protect every dollar that comes their way.
It is also important that the faces of Australians are seen on our screens and that the stories that they tell are our Australian stories written by our Australian screenwriters. Protecting their industry protects our Australian stories for generations to come. Australian films have been acclaimed for many, many years. A friend who works in the film industry, Chris Holton, has always loved movies such as Breaker Morant and Gallipoli, and obviously the Mad Max movies. But Australian movies do so much—movies like Lantana;The Adventures of Priscilla, Queen of the Desert;The Castle; Muriel's Wedding and Death in Brunswick, and I'd even throw in there The Rocket and Master and Commander, to name just a few of my favourite movies. They're all Australian stories, or largely Australian stories, that will now live on forever.
In another life, I was also in a band that still plays occasionally; we play together every three years as a fundraiser. We didn't make too much money from our musical endeavours—largely written by John Carozza, who is the lead singer as well—but we did play in our own voice. They were songs that we wrote and we played, and it was part of our Australian story. Obviously, the best Australian music has an Australian voice, whether it be country music, classical music, modern pop music, rap music—all of those voices tell our story. I'll mention a couple of my favourite bands, also with a Queensland flavour: The Saints, from Brisbane, who were at the cutting edge of punk, with Chris Bailey and Ed Kuepper and the gang doing so much for punk music back in the seventies; also The Go-Betweens with Grant McLennan and Robert Forster, who are renowned songwriters; and I'd also have to mention The Triffids, from Perth. The point being, we will all have our favourite Australian authors, Australian TV shows, Australian movies and Australian musicians. We must always be prepared to look after our artists. This mechanism, this bill we have before us today, will help us to do so. People must be prepared to support Australian artists, and this legislation will go some way to making it easier to do so.
I'm pleased to rise to speak on this Copyright Amendment (Online Infringement) Bill 2018, which is actually quite a small but sensible change to our copyright law, which seeks to protect rights-holders in a time of incredible transition.
I wasn't originally going to speak on this today, but I heard my colleague the member for Chifley speaking earlier, and I felt the need to add a little bit of nuance to the debate. I worked for the Association of Independent Record Labels, which was the trade association for small record labels. We represented about 95 per cent of the independent sector during the time of Napster. We knew Napster was coming because, some seven years earlier, a man called Jeff Paterson, who was about 19, started a business called the Internet Underground Music Archive at the University of California, Santa Cruz. That was 1992. It was a music download site that was so popular that it crashed the servers at the university, and they had to ban music downloads for quite a few years while they caught up with it. And then Napster was there from 1999 to 2001.
I wanted to say that these changes are not just about the consumer and the rights-holder. In fact, in many ways, they're not about that at all. If Napster had charged the consumer and the artists had been paid for all those transactions, it's the distributor who would have been the loser. The major owners in the music industry back then was actually the people in the middle—the distributors. As the music industry went towards economies of scale, where you made more and more money the more you produced, large distributors that were capable of shifting large amounts of products moved into the middle, and they took 60 per cent of retail—they were actually the big owners. And they happened to also be the big record companies—all the major record companies have major distribution arms, and it was the distribution side of it that was actually under threat by online trading. Even if the artist was paid, the distributor was the one that would lose.
In some ways we're in a similar situation now. We have seen a move in the music industry—and all the copyright owners, industries, and all the IP industries, for that matter—from economies of scale, backwards, to economies of scope. Economies of scale is where you reduce your cost of production by creating many more: so if you make 100,000, your cost of production goes down, compared to making one. We all know what that is, and in the industrial age economies of scale was the source of competitive advantage. The bigger you are, the cheaper you make your unit cost of production, the more you make. But, particularly with IP, we’re now moving into a world where economies of scope is the determinant of competitive advantage, and it's quite different. The old theory of economies of scope—when we were giving lectures about it in the arts industry some 30 years ago—is that if you made two or more types of goods, you could do that for less cost than making two separate goods. That's called economies of scope, and you see it in advanced manufacturing.
But, in the arts industry, you always knew that it wasn't about the goods that were made; it was about the selling of them, because in the arts industry we hadn't been industrialised. We didn't just create a product, which is a piece of art; we actually created a relationship with our consumer. We called it our fan base. What we needed to do—because we put on concerts, where you put on one night and thousands of people had to turn up—was build relationships with our market, and our market relationship was as valuable as anything. In fact, it was the thing that helped us survive.
Economies of scope, we knew, would be when you could sell two or more products to the same market, rather than have to develop different markets for each product. So economies of scope, we knew 30 years ago, would make our market the product, as the world moved out of the industrial age into what we then called the information age. We knew that the market—the people who bought your product and your relationship with them—was going to be the source of your competitive advantage.
What we have now in the online world is a whole range of new organisations slipping into the middle between the consumer and the artist and actually starting to own the relationship. They're moving into that middle space because they know—the Amazons and even, in restaurants, the Deliveroos; all of those, they all know—that, if they can collect the appropriate relationship and the data about that relationship, they can sell more products to that one market than by providing different markets for each product. It's economies of scope. It's a major change in where the economic advantage is, and we can see it happening every day.
It's not going to stop. It's actually a really interesting change. It's on its way; it's not going to stop. But, as we transition from the old model where the artist owned their relationship with their market to a world where someone else inserts themselves in the middle and owns the market, we're actually losing a significant part of the assets of the artist. We have a very difficult transition if an artist cannot actually own the information and the data on their own market, because we have someone else inserting themselves in the middle. It is really interesting, and we're already hearing stories out of countries where Amazon, for example, is much more powerful about the increasing inability of artists to launch their new product, because they no longer have their fan base.
I want to tell you how important that is. When I was working for the Lyric Opera of Queensland back in the mid-eighties, the internet was kind of not there. We had a database then that I built where we knew the names and addresses of everybody who had bought a ticket to see an opera company for the last 10 years and when they bought it relative to our marketing spend. We knew, if we mailed them, how long it took them to buy. We knew exactly. We knew that, if we put up television advertising, these people were most likely to buy, so we didn't do direct mail to them. We had worked out when they bought relative to what we spent over about 10 years, and that was in the mid-eighties. We knew that our capacity to reach our market made us viable, and our capacity to reach our market was our source of competitive advantage.
So I would just say to my colleague the member for Chifley: this is a much more nuanced argument. This isn't just an argument about the copyright as we know it now; it's an argument about the value of the data, who owns it, how it's created and how it's managed. The whole structure of the viability of artists is now changing. Some of the change will be for the good; some of it won't.
Even back in the days when the internet was very early, we brought out Jeff Patterson. I brought him out. I ran a national conference on music in the internet in the early nineties, and we brought two people. One was Jeff Patterson, who'd started the Internet Underground Music Archive. He looked like a child. He was 19 years old, and he created this thing that crashed the entire US internet. And we brought out Bill Kreutzmann, who was the drummer for the Grateful Dead. I did that for a really simple reason: The Grateful Dead allowed you to copyright it—to steal anything. You could take a video camera into their concert, videotape it and sell it. You could bootleg. You could take in a recorder, record it and sell it online. You could bootleg; you could do whatever you wanted. They were the biggest-grossing live band in the world because they actually used online as a way of promoting their next gig.
But what they were doing was using their online pirate network to build their fan base, which they were then able to own. So they used it in a different way. We had another young man at that time, whose name I can't recall, who had been seriously pirated in Japan and a few countries that he had been to before that. But it worked in his favour because it actually built his fan base. That's not the case for most. We need to protect copyright for artists because, for every exemption to the rule, there are many others who need that protection—and this legislation is a part of that.
This is a much more nuanced issue than we think. When the economic model does fully change and we have a completely different world where economies of scale are not it—where economies of scope and your relationship with your market and your ability to know and reach that market is the entire source of competitive advantage—we want our creative industry to still be there. We don't want it to be knocked out on the way because we failed to adjust our laws to provide them protection through the transition. At some point in the future—and it won't be far away—we're going to have a very serious discussion about the nature of copyright and the nature of protection and the nature of things of value. What is of value in a post-industrial world? We're going to have a very serious conversation about it. For the moment, this amendment, which seeks to protect the rights of copyright owners now as this transition continues, is incredibly important because, at the end of the day, we still want them to be there when the transition is complete. Thank you.
I thank all of the members who spoke in this debate in the House on the Copyright Amendment (Online Infringement) Bill 2018. In particular, I to thank and acknowledge the member for Parramatta for her remarks which, of course, drew on her deep lifetime experience as an artist, an arts administrator and an arts business person. She talked about the bill's importance for artists, for creatives and, indeed, for fans of Australian artists. And I have to admit I enjoyed her gentle rebuke of the member for Chifley, who, disappointingly, characterised this bill as being pro rightsholder and anti consumer, which is not true. In stark contrast were the remarks we heard from the member for Parramatta and the remarks we heard earlier from the shadow Attorney-General, who expressed his support and the support of the Labor Party for creatives and rightsholders. I acknowledge the support of the opposition for this important bill which is an important step in modernising Australia's copyright laws.
Australian films, TV shows and music are more accessible and cheaper than they have ever been. We can all enjoy this entertainment, this content, on a range of devices, at home, on the bus to work or travelling on holidays. The passage of this bill is getting the legislative settings right so those settings complement and support the very positive technology and business led developments we've seen in the sector. We can be very proud of the fact that Australia's creative industries are thriving and world class. Their contribution to the crucial fabric of our nation is enormously significant. Their contribution to our economy is also significant.
As the Minister for Communications and the Arts has said, government support for the creative industries has been boosted in recent years, including through small business tax relief and our Location Incentive Program. Our government will not tolerate the hard work of our creative industries, underpinned by targeted policy settings, being undone by allowing online piracy to go unaddressed. That's why this bill will update the website-blocking scheme in the Copyright Act 1968, which since 2015 has provided an effective means for copyright owners to address large-scale copyright infringement by overseas operators.
I would note for the record that any criticism from the other side of the House concerning the coalition's safe harbour reforms are unfounded. Those opposite did nothing for six years on this front. It was our Liberal-National government which progressed reform in this area.
The measures in this bill will strengthen our ability to fight online copyright infringement. As with previous copyright bills dealing with matters such as disability access and service providers, there has been broad consensus in this chamber to take action to positively reform Australia's copyright system. I would also like to express the thanks of the government and of the minister to all of the stakeholders who were consulted on this bill and provided feedback. I commend this bill to the House.
Question agreed to.
Bill read a second time.