Australian startups and tech companies are likely to miss out on significant copyright reforms in a “disappointing result” for the sector.
Late last week a Coalition-led senate committee gave the green light to a government bill excluding tech firms from an expansion to the safe harbour regime.
The government also last week began consultations on changes to the fair dealing scheme, revealing it may opt to expand the current process rather than introduce a fair use scheme that many tech giants have called for.
Multinational tech platform companies have campaigned alongside startups for several years for changes to make Australia’s copyright regime friendlier to early-stage tech companies.
But in the face of intense lobbying from rights holders, the government held off making any significant reform of copyright for online platforms or startups.
It’s another blow for the tech giants, which are currently facing intense scrutiny from the federal government on matters such as tax, and an ACCC inquiry into how digital platforms are impacting competition and the media.
The safe harbour scheme provides legal protection for service providers that host copyright infringing content as long as they take reasonable steps to remove it. The scheme currently only applies to telcos and internet service providers, but the government last year moved to expand the regime to include other service providers.
Despite earlier indicating its intention to expand safe harbour for online platforms, tech companies were not included in the government’s legislation late last year.
The government said it is taking the process slowly, and would consult with stakeholders on any further extensions.
Startups and larger tech firms have been lobbying for an expansion to the safe harbour scheme for years, arguing that the current laws put several online platforms, like Redbubble and Envato, at legal risk for the actions of their users, even if they quickly remove the content.
The government’s “incremental approach” was given the tick by the Senate committee, which had a majority of Coalition senators.
“Given the divergence of stakeholder views and the complexity of the issues being considered, the committee supports the government’s incremental approach to safe harbour reform,” the report said.
“The proposed amendments will ensure that educational and cultural institutions and organisations assisting people with a disability will be afforded protection immediately,” it said.
“The committee considers this to be a balanced and reasonable approach. The committee also notes and appreciates the reassurance that the department will continue its consultation with stakeholders.”
The committee’s report said that a “blanket extension still remains a highly contested reform” and the consultation would “try and understand and unpick all of the issues”.
The committee also pointed to “disputed evidence” that expanded safe harbour rules leads to further innovation.
“We don’t find that direct linkage. There’s some evidence about a general copyright approach. I know that there have been some studies that have looked at flexible exceptions and their contributions to innovation,” it said.
“But we did not find any evidence that directly linked safe harbour to an increase in innovation.”
“The complexity of the issues and the really diverse views and polarised views of stakeholders makes it a really difficult path to navigate, and that is why we are really trying to take what is a balanced approach where there is an openness to extending safe harbour.”
The last six public consultations on copyright reform have recommended expanding safe harbours more widely to include tech companies.
Two Greens senators on the committee released a dissenting report, arguing that safe harbour should be quickly extended to Australian tech companies.
“We do not support the piecemeal manner in which the government is addressing the long overdue updating of Australian copyright laws,”
“We do not support the limited definition of ‘service providers’ used in this bill, which excludes Australian tech companies and online content providers, stifling innovation and the ability of Australian tech companies to compete internationally,” the dissenting report said.
“We do not believe that this bill achieves the necessary balance between the rights and protections of content providers and content creators. We do not believe that this bill will be effective in achieving the policy objectives, due to the lack of protection provided for third-party organisations carrying out activities on behalf of service providers.”
StartupAus chief executive Alex McCauley said the lack of copyright reforms for tech companies is a “disappointing result”.
“The decision not to extend safe harbour protections to technology companies will leave some of our most successful high-growth companies exposed to legal risk, driving high value ideas offshore,” Mr McCauley said.
The government also last week opened consultations on its plan to expand the fair use copyright exceptions.
The Communications department is seeking feedback on whether there is “general support” to grant these exceptions to other industries, and is considering adding new fair dealing exceptions for specific purposes, or introducing a fair use copyright exception.
Fair use allows an exceptional from copyright infringements if the use of the material is deemed to be “fair”. There has been a large campaign from tech giants including Wikipedia and Google for this to be introduced in Australia, with the tech firms saying that they could not be based in Australia due to the current rules.
“There are arguments that Australia’s current exceptions for fair dealing are restrictive when compared with international counterparts and may not permit some reasonable fair uses of copyright material,” the government consultation paper said.
“However, this is a complex issue and there are different approaches available to address it.
There have already been eight inquiries into fair use copyright rules in the last two decades, with nearly all of them recommending that the scheme be introduced to replace the current fair dealing scheme.
Recently the Productivity Commission delivered a report to government at the end of 2016, recommending that this would return fairness to the innovative firms, universities and schools currently bearing the cost of the current arrangement.
“Fair use would allow Australia’s copyright arrangements to adapt to new circumstances, technologies and uses over time.
“The opportunities Australian businesses and consumers forgo because of the current inflexible exceptions are much more extensive,” the Productivity Commission’s report said.