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Australia's Proposed Copyright Alert System Allows Rightsholders to Spy on Users

February 24, 2015

Australia's Proposed Copyright Alert System Allows Rightsholders to Spy on Users

Copyright policy is not something that should be rushed into without adequate evidence and consultation. Yet since only last December, the Australian government has sent stakeholders scrambling to develop a new code of practice on copyright that would could change the lay of the land for the Internet industry for decades to come. The code is designed to force ISPs to adopt new “reasonable measures” to deter copyright infringement—measures that the Australian High Court had earlier decided that they were under no obligation to adopt. The results of that process have just been released in the form of a draft industry code, which is open for public comment until March 23, 2015.

We have seen a number of so-called “graduated response” schemes like this in other countries already; in fact, Australian academic, Rebecca Giblin, wrote a detailed critique of them last year, finding little evidence of such schemes being either successful or effective. Even since that study was released, the problems with graduated response schemes have continued to mount. In Canada, for example rightsholders have demanded that ISPs send notices to users that are quite simply fraudulent; falsely claiming that Canadian infringers can be made to pay American penalties, in an attempt to shake them down for an inflated settlement.

In comparison, the proposed Australian system, despite being conceived in such a rush, does look a little better. It would require an impartial body (a Copyright Information Panel or CIP) to write the notices that users receive, reducing the likelihood that they will spin the kind of fairy tales that claimants have produced in Canada. The CIP will include representatives from rightsholders, ISPs, and consumer groups, and be funded by rightsholders and ISPs jointly.

Further, under the Australian system, the notices must include an acknowledgment that the alleged infringement may not necessarily have been undertaken by the named user. And if the user believes that a mistake was made, they are entitled, after receiving a third notice, to mount a challenge before an independent Adjudication Panel, for a refundable $25 fee, which will effect a stay of any further action by the rightsholder. These safeguards add up to an improvement of the Australian proposal over the Canadian system now in force.

Another improvement of the Australian proposal, when compared with the similar United States Copyright Alert System, is that penalties cannot automatically be handed down by ISPs to users, for allegations of copyright infringement that haven't been proven in court. Instead, after a third notice is sent (and unless the user challenges it), the ISP will cooperate with the rightsholder if it chooses to seek a court order for disclosure of the user's identity as a preparatory step to legal proceedings for copyright infringement. The requirement that a court approve these steps is welcome.

Even so, the foundations of the system that leads to those notices remains deeply defective—by design, they are built on privatized snooping on what Internet users do online. Generally they would do this by way of rightsholder informants lurking on file sharing networks posing as users, where they sniff for data that looks like unauthorized file sharing, and record the IP addresses of the users involved. Although the Australian code would establish some vetting of the operation of these covert rightsholder systems, there would still be no need to check for possible fair use (or, in Australian law, fair dealing) claims before notices of claimed infringement are sent.

The draft code would also authorize the ISP to tamper with the user's Internet connection, by injecting code into the responses from websites that the user browses to display a intrusive pop-up notice that they have to acknowledge after the third and final notice is sent. This kind of content injection, which is characteristic of a malware attack, has significant security implications that the draft code fails to address.

Why the rush to institute these measures against Australian Internet users, when revenues of the Australian copyright industry are booming? As we have previously reported, it has something to do with the fact that free trade agreements that Australia has recently concluded, and others that remain underway, such as the Trans-Pacific Partnership (TPP), arguably require that ISPs be incentivized to act against copyright infringers. But why should Australia—or any country—be pushed into making such significant changes to its copyright laws by treaties that trade negotiators hash out behind closed doors?

By a happy coincidence, the public comment period for the graduated response industry code coincides with the tail end of the comment period for a government inquiry into Australia's treaty-making process. That inquiry, which ends this Friday, has already attracted a pile of comments critical of the lack of transparency and accountability of trade negotiation processes, that allows rightsholders to muscle through special interest laws that would never pass muster if debated in an open, democratic forum.

Meanwhile, as Australia fusses around with policing copyright against Internet users in a likely vain attempt to curtail piracy, it is missing the opportunity to make a much longer-term investment in the country's technological future. Back when Australia's Attorney General first began talking about instituting a graduated response regime, he also passed up the chance to embrace the Australian Law Reform Commission's recommendation that fair use be added to copyright law. In Fair Use Week, it bears asking—is the adoption of a copycat graduated response scheme that has failed elsewhere in the world really going to do more for homegrown creativity and innovation than embracing fair use?

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