Encryption hurts chances for growth

James Riley
Editorial Director

There is a broad consensus across Australia’s tech industry that the country’s encryption laws have hurt the sector’s ability to export and innovate, according to submissions to a Parliamentary inquiry investigating the controversial laws.

In its submission to a review of the law, Australian cloud provider Vault Cloud said the export of its technology has been “materially and detrimentally impacted by perception of the AA Act.”

“As foreign governments and customers are assessing against a ‘media headline test’, we are in an unfortunate position where logical persuasion is not sufficient to counter perception,” Vault Cloud chief executive Rupert Taylor-Price said in the submission.

Rupert Taylor-Price: The encryption laws have had a material impact on exports

“We are currently seeing an exodus of data from Australia including physical, operational and legal sovereignty.”

Mr Taylor-Price said the company has also seen multinationals blacklist Australia as a place to store data.

“The AA Act’s perception detracts from the attractiveness of hosting data in Australia,” he said.

“As multinational companies move physical, operational and legal jurisdiction offshore, they easily sidestep the AA Act – in effect thwarting the AA Act.

“Current legislation does not prevent these companies continuing to provide services to Australia citizens, companies or Government. In effect, these companies are eluding the law and attaining revenue while every day Australian citizens are suffering the consequences.”

The cloud provider has recommended the government introduce a Data Sovereignty Policy that mandates all data in the cloud should be sovereign and require all staff to be vetted for clearance where appropriate.

Similarly, Electronic Frontiers Australia reinforced that the lack of detail in the clarity of the anti-encryption law can impact on industry and competitiveness, and ultimately have “adverse impact on the technology confidence” in Australia.

“The Orwellian and oppressive nature of these provisions and lack of clarity in key definitions stifles innovation, significantly erodes privacy and creates a system where law enforcement is able to covertly monitor Australia (and our international allies) without transparent or readily available recourse,” EFA chair of policy committee Angus Murray said in its submission to a review of the law.

Mr Murray highlighted the impact by using Australian firm Centralized as an example. The company’s platform by nature relies on detailed and intimate user data.

However, according to Mr Murray the passing of anti-encryption laws have hurt the company’s ability to protect the privacy of user data. As a result, the company has relocated its intellectual property to the United States and research and development to Israel.

“It is our submission that this case study is not unique and that it is highly likely that a significant portion of the Australian technology industry has been required to either relocate, cease development and/or restrict operations,” he said.

These views are consistent with those expressed by the Australian Information and Industry Association that has called for the government to urgently analyse the impact the Act has on the tech industry’s export activities and commit to ongoing monitoring and reporting on these activities, as part of its submission.

The AIIA recommended the government asses and monitor the impact of any withdrawals of multinationals and national companies from the Australian market on the cybersecurity integrity of government agencies and Australian businesses.

Do you know more? Contact James Riley via Email.

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